The National Academies Press: Developing The "Guide For The Process of Managing Risk On Rapid Renewal Projects" (2014)

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Developing the "Guide for the Process of Managing Risk on Rapid Renewal Projects"
The Second
S T R A T E G I C H I G H W A Y R E S E A R C H P R O G R A M
REPORT S2-R09-RW-1
Developing the “Guide for the Process of

Managing Risk on Rapid Renewal Projects”
William Roberds and Travis McGrath
Golder Associates Inc.
with
Keith Molenaar
University of Colorado at Boulder
Michael Loulakis
Capital Project Strategies, LLC
Ted Ferragut
TDC Partners, Ltd.
T R A N S P O R TAT I O N R E S E A R C H B O A R D
WASHINGTON, D.C.
2015
www.TRB.org
Copyright National Academy of Sciences. All rights reserved.

Subject Areas
Construction
Highways

The Second Strategic Highway SHRP 2 Report S2-R09-RW-1

Research Program
ISBN: 978-0-309-27430-2
America’s highway system is critical to meeting the mobility and
economic needs of local communities, regions, and the nation. © 2015 National Academy of Sciences. All rights reserved.
Developments in research and technology—such as advanced
materials, communications technology, new data collection tech-
nologies, and human factors science—offer a new opportunity Copyright Information
to improve the safety and reliability of this important national
Authors herein are responsible for the authenticity of their materials and for
resource. Breakthrough resolution of significant transportation obtaining written permissions from publishers or persons who own the copy-
problems, however, requires concentrated resources over a short right to any previously published or copyrighted material used herein.
time frame. Reflecting this need, the second Strategic Highway The second Strategic Highway Research Program grants permission to repro-
Research Program (SHRP 2) has an intense, large-scale focus, duce material in this publication for classroom and not-for-profit purposes.
Permission is given with the understanding that none of the material will be
integrates multiple fields of research and technology, and is used to imply TRB, AASHTO, or FHWA endorsement of a particular prod-
fundamentally different from the broad, mission-oriented, uct, method, or practice. It is expected that those reproducing material in this
document for educational and not-for-profit purposes will give appropriate
discipline-based research programs that have been the mainstay acknowledgment of the source of any reprinted or reproduced material. For
of the highway research industry for half a century. other uses of the material, request permission from SHRP 2.
Note: SHRP 2 report numbers convey the program, focus area, project number,
and publication format. Report numbers ending in “w” are published as web
The need for SHRP 2 was identified in TRB Special Report 260: documents only.
Strategic Highway Research: Saving Lives, Reducing Congestion,
Improving Quality of Life, published in 2001 and based on a
study sponsored by Congress through the Transportation Equity Notice
Act for the 21st Century (TEA-21). SHRP 2, modeled after the The project that is the subject of this report was a part of the second Strategic
Highway Research Program, conducted by the Transportation Research Board
first Strategic Highway Research Program, is a focused, time- with the approval of the Governing Board of the National Research Council.
constrained, management-driven program designed to com
The members of the technical committee selected to monitor this project and
plement existing highway research programs. SHRP 2 focuses review this report were chosen for their special competencies and with regard
on applied research in four areas: Safety, to prevent or reduce the for appropriate balance. The report was reviewed by the technical committee
and accepted for publication according to procedures established and overseen
severity of highway crashes by understanding driver behavior; by the Transportation Research Board and approved by the Governing Board of
Renewal, to address the aging infrastructure through rapid design the National Research Council.
and construction methods that cause minimal disruptions and The opinions and conclusions expressed or implied in this report are those of
the researchers who performed the research and are not necessarily those of the
produce lasting facilities; Reliability, to reduce congestion through Transportation Research Board, the National Research Council, or the program
incident reduction, management, response, and mitigation; and sponsors.
Capacity, to integrate mobility, economic, environmental, and The Transportation Research Board of the National Academies, the National
community needs in the planning and designing of new trans- Research Council, and the sponsors of the second Strategic Highway Research
Program do not endorse products or manufacturers. Trade or manufacturers’
portation capacity. names appear herein solely because they are considered essential to the object
of the report.
SHRP 2 was authorized in August 2005 as part of the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU). The program is managed by the
Transportation Research Board (TRB) on behalf of the National
Research Council (NRC). SHRP 2 is conducted under a memo-
randum of understanding among the American Association of
State Highway and Transportation Officials (AASHTO), the
Federal Highway Administration (FHWA), and the National
Academy of Sciences, parent organization of TRB and NRC.
The program provides for competitive, merit-based selection
SHRP 2 Reports
of research contractors; independent research project oversight;
and dissemination of research results. Available by subscription and through the TRB online bookstore:
www.mytrb.org/store
Contact the TRB Business Office:
202-334-3213
More information about SHRP 2:

www.TRB.org/SHRP2

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars
engaged in scientific and engineering research, dedicated to the furtherance of science and technology and
to their use for the general welfare. On the authority of the charter granted to it by Congress in 1863, the
Academy has a mandate that requires it to advise the federal government on scientific and technical matters.
Dr. Ralph J. Cicerone is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of the National Academy
of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and
in the selection of its members, sharing with the National Academy of Sciences the responsibility for
advising the federal government. The National Academy of Engineering also sponsors engineering programs
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respectively, of the National Research Council.
The Transportation Research Board is one of six major divisions of the National Research Council. The
mission of the Transportation Research Board is to provide leadership in transportation innovation and
progress through research and information exchange, conducted within a setting that is objective, interdisci-
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other transportation researchers and practitioners from the public and private sectors and academia, all of
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tion, and other organizations and individuals interested in the development of transportation. www.TRB.org
www.national-academies.org

SHRP 2 STAFF
Ann M. Brach, Director

Stephen J. Andrle, Deputy Director
Neil J. Pedersen, Deputy Director, Implementation and Communications
Cynthia Allen, Editor
Kenneth Campbell, Chief Program Officer, Safety
JoAnn Coleman, Senior Program Assistant, Capacity and Reliability
Eduardo Cusicanqui, Financial Officer
Richard Deering, Special Consultant, Safety Data Phase 1 Planning
Shantia Douglas, Senior Financial Assistant
Charles Fay, Senior Program Officer, Safety
Carol Ford, Senior Program Assistant, Renewal and Safety
James Hedlund, Special Consultant, Safety Coordination
Alyssa Hernandez, Reports Coordinator
Ralph Hessian, Special Consultant, Capacity and Reliability
Andy Horosko, Special Consultant, Safety Field Data Collection
William Hyman, Senior Program Officer, Reliability
Linda Mason, Communications Officer
David Plazak, Senior Program Officer, Capacity and Reliability
Rachel Taylor, Senior Editorial Assistant
Dean Trackman, Managing Editor
Connie Woldu, Administrative Coordinator
ACKNOWLEDGMENTS
This work was sponsored by the Federal Highway Administration in cooperation with the American Asso-
ciation of State Highway and Transportation Officials. It was conducted in the second Strategic Highway
Research Program (SHRP 2), which is administered by the Transportation Research Board of the National
Academies. This project was managed by James W. Bryant, Jr., Senior Program Officer for SHRP 2 Renewal,
and Andy Horosko, Special Consultant for SHRP 2 Renewal.
The research team consisted of William Roberds and Travis McGrath of Golder Associates Inc. and
Keith Molenaar of the University of Colorado at Boulder as co-principal investigators, supported by
Michael Loulakis and Ted Ferragut. They thank all those transportation professionals who provided their
expertise and time to this research. The team particularly thanks the following state departments of trans-
portation personnel (listed in alphabetical order) for their participation in developing the guide and imple-
mentation materials: Brian Blanchard, Florida; Thomas Bohuslav, Texas; Dan D’Angelo, New York State;
Steven DeWitt, North Carolina Turnpike Authority; Fred Doehring, Utah; Pat Friesen, Colorado; Mark
Gabel, Washington State; Mike Ginnaty, Minnesota; Nabeel Khwaja, Texas; Thomas Pelnik, Virginia; and
Ken Solak, California.

FOREWORD
James W. Bryant, Jr., PhD, PE, SHRP 2 Senior Program Officer, Renewal
In recent years, risk management has become an area of emphasis for transportation agen-
cies. Project risks must be managed regardless of how they are allocated between the con-
tractor and the transportation agency. Transportation agencies continue to seek a balanced
approach to risk allocation because, generally speaking, increased risks to the contractor will
be reflected in increased bid prices. The incorrect allocation of risks can also lead to project
delays and increased costs.
Agencies are moving toward the use of innovative contracting approaches and accelerated
construction techniques to complete projects more rapidly. Although guidance exists and is
being developed for managing risks on transportation projects, this guidance has generally
not included consideration of the unique features of rapid renewal projects, which are the
ones that use accelerated project delivery.
Several state transportation agencies have been exposed to the formal risk management
required by the Federal Highway Administration on infrastructure projects that exceed a
total estimated cost of $500 million. Few transportation agencies use formalized risk assess-
ment and management programs that are not associated with “major projects.”
This report and the associated guide and supporting products provide information and
tools that transportation agencies can use to apply risk management principles systemati-
cally to their projects. They are specifically useful for projects that are below the $500 million
threshold for major projects.
The primary objectives of SHRP 2 Renewal Project R09 were to address the general lack
of understanding of risk and risk management options associated with the unique aspects of
rapid renewal projects and to develop practical guidance and materials for the application
of risk management methods to the rapid renewal project development process in a manner
consistent with state transportation agency business practices.
The products developed as part of this project include (1) a comprehensive guide, with
checklists and an example application, and (2) associated implementation materials for
conducting risk management on nonmajor rapid renewal projects, including a presenta-
tion introducing the risk management process and a Microsoft Excel template (with user’s
guide) for both documenting the process and conducting the necessary analyses.
The report, guide, and training materials provide the state of the practice for risk man-
agement on rapid renewal projects, as well as a detailed process of risk identification and
mitigation strategies. The materials will be useful to state departments of transportation,
municipal agencies, and consultants working on projects that involve accelerated project
delivery and will make the risk management process more accessible for use as a standard
project solution.

CONTENTS
1 Executive Summary
3 CHAP T ER 1 Background
3 Problem Statement from Request for Proposal
3 Background
4 Research Objectives
5 Research Approach
6 CHAP T ER 2 Findings and Applications
6 Overview
6 Task 1: Develop a Work Plan
13 Task 2: Develop a Draft Guide and Implementation Materials
19 Task 3: Conduct Pilot Workshops
22 Task 4: Finalize Guide and Implementation Materials
22 Task 5: Manage the Study
23 CHAP T ER 3 Conclusions and Suggested Additional Research
23 Conclusions
23 Suggested Additional Research
25 References
26 Appendix A. Annotated Bibliography and Agency Contact List
34 Appendix B. Study Management
35 Appendix C. Gap Analysis
47 Appendix D. Other Research Activities and Results
50 Appendix E. Pilot Workshops
61 Appendix F. Recommendations for Future Work

Executive Summary
This report documents the development of the Guide for the Process of Managing Risk on Rapid
Renewal Projects (referred to as the guide) and the associated materials needed for successful
implementation of that guide (Golder Associates et al. 2014), which are available at http://www
.trb.org/Main/Blurbs/168369.aspx.
The guide and materials are intended to help departments of transportation (DOTs) manage
risk during the development process for rapid renewal projects, thus optimizing project perfor-
mance (with respect to cost, schedule, disruption, and longevity). The guide and materials address
methods for risk identification, assessment, analysis, and management (both planning and sub-
sequent implementation, and consideration of proactive individual risk reduction, contingency
to cover remaining risks collectively, and monitoring–updating). This includes methods for objec-
tively prioritizing risks, evaluating the cost-effectiveness of potential individual risk reduction
actions, and estimating project performance. As part of developing the guide and materials, vari-
ous entities successfully applied the process to two projects and demonstrated it in two training
workshops for DOT staff.
These efforts resulted in the following products:
• A comprehensive guide, which includes extensive checklists and a comprehensive example of a

rapid renewal project application (for illustration of concepts and for training purposes).
• Associated implementation materials for conducting risk management on relatively simple
rapid renewal projects, including (a) annotated Microsoft (MS) PowerPoint training presenta-
tions (with practical exercises and discussions) for each section of the guide, (b) a PowerPoint
presentation for introducing the risk management process at the beginning of future risk
management workshops, (c) forms for documenting the process, and (d) an MS Excel work-
book template (with user’s guide) for both documenting the process (similar to the forms)
and automatically conducting the necessary analyses.
The primary objectives of this study were to address the general lack of understanding of risk
and risk management associated with the unique aspects of rapid renewal projects and to develop
practical guidance and materials for the application of risk management methods to the process
of developing rapid renewal projects in a manner consistent with the business practices of DOTs.
Although some guidance exists and more is being developed for managing risks on transporta-
tion projects, that guidance has generally not included consideration of the unique features of
rapid renewal projects. Renewal Project R09 was designed to fill the definitive need for guidance
and materials for managing risks on rapid renewal projects.
The guide and materials will enable DOTs to facilitate risk workshops for relatively simple rapid
renewal projects (as well as other design and construction projects) and thus develop and sub
sequently implement comprehensive risk management plans to improve project performance.

The research team anticipates that through the implementation of the principles and practices
described in the guide, DOTs can develop a culture of risk management and more successfully
complete rapid renewal projects, as well as non–rapid renewal projects (to which the guide and
materials also apply).
To develop the guide and materials, the research team performed the following technical tasks:
• Task 1: Identify gaps in the current processes available for managing risks on rapid renewal
projects and develop an appropriate plan to fill them.
• Task 2: In accordance with the approved plan, fill the gaps in current processes available for
managing risks on rapid renewal projects and develop a draft guide and implementation
materials for managing risks on rapid renewal projects.
• Task 3: Apply the draft guide and materials to at least two rapid renewal projects and conduct
at least two training workshops.
• Task 4: Finalize the guide and materials on the basis of workshop feedback.

Chapter 1
Background
Problem Statement from have been substantial and multifaceted. However, risks can be
Request for Proposal magnified in rapid renewal projects, which involve acceler-
ated environmental–permitting processes and construction
The overall goal of the SHRP 2 Renewal program is to develop methods in conjunction with innovative contracting meth-
a consistent, systematic approach to performing highway ods (possibly including project financing). DOTs are even less
renewal that works rapidly, minimizes disruption, and pro- experienced with rapid-renewal types of risks and how they
duces long-lived facilities. The scope of renewal applies to all can be evaluated and effectively managed. However, the stakes
classes of roads. can be quite large and can include significant project delays
As such, the focus of SHRP 2 rapid renewal research is to and budget overruns, as well as significant disruption during
develop a systematic approach to renewing the aging highway construction and poor longevity.
infrastructure through rapid design and construction meth- Project R09 developed a guide for implementing processes
ods that cause minimal disruption and produce long-lived for risk management on rapid renewal projects. The Guide for
facilities. Fulfilling the objectives of rapid renewal requires the Process of Managing Risk on Rapid Renewal Projects (the
the use of innovative contracting processes and a departure guide) is intended for use by transportation agencies to manage
from “business as usual.” Many of these innovative techniques risk during the process of project development (Golder Associ-
involve shifts in the burden of risk from the state to the con- ates et al. 2014). The guide illustrates methods that can be used
tractor. Renewal Project R09 addresses the general lack of to identify, assess, analyze, mitigate, allocate, and monitor risk.
understanding of risk and risk-transfer decisions associated It includes methods to determine the economic consequences
with some contracting approaches. of risk transfer to the various parties involved in a project.
Different contracting approaches, such as design–build–
operate–maintain–transfer (D–B–O–M–T), build–operate–
transfer, warranties, design–bid–build, and design–build,
Background
generate different levels of risk for all parties involved. No stan- Cost and schedule overruns, especially relative to initial esti-
dardized systematic process exists to quantify the risks for the mates, are relatively common on DOT projects and often lead
parties involved (e.g., the transfer of risk from DOT to the con- to many other issues (e.g., those related to funding, politics).
tractor). Objective guidance on the level and management of Poor estimates can lead to poor choices among project alter-
risk is needed to ensure industry acceptance of the concept natives. Overruns generally result from underestimates (e.g.,
and to assist states and industry in assessing the level of risk in quantities or in unit costs), problems (e.g., change in scope,
associated with various contracting approaches. permit delays, errors), or both when they were not adequately
This research project is based on the work recorded in the taken into account in either project plans or estimates, either
Federal Highway Administration (FHWA) document Guide specifically or collectively through contingency. Such under-
to Risk Assessment and Allocation for Highway Construction estimates and incomplete consideration of problems could be
Management (Risk Guide) (Molenaar et al. 2006). The Risk either intentional (e.g., project advocacy) or unintentional
Guide notes that few U.S. state departments of transporta- (e.g., optimism, errors, ignorance).
tion (DOTs) use formalized risk assessment and management For most problems, the cost and schedule effects are often
programs, although awareness is growing. For those DOTs a function of when they occur or when they are discovered.
that have adopted formal risk-based programs, the benefits In many cases, if they are discovered early in a project, the cost

or schedule impact is smaller than if discovered late because of service (traffic). Understanding project performance
they are generally easier to fix earlier in the project (e.g., through uncertainty enables more effective project decisions, such
avoidance). Most problems are highly uncertain beforehand; if as establishment of funding levels and decisions among
they were certain, they should have already been incorporated project alternatives.
into the project plans and the associated cost and schedule • To optimize project performance through cost-effective
estimates. For potential (rather than certain) problems, once management of potential problems and opportunities
they are recognized as a possibility, the question becomes (risks)—for example, through design, choice of construc-
what to do about them beforehand: (1) fix them immedi- tion methods, contract provisions, and the like. Optimizing
ately, typically at some cost, often incompletely, and perhaps project performance increases the likelihood of desirable
unnecessarily, because they might not occur if left alone; or outcomes, such as meeting an established budget and sched-
(2) do not fix them and take a chance that they will not occur ule and minimizing the likelihood of undesirable outcomes.
with associated cost and schedule impacts. Of course, for poten-
tial problems that have not been recognized, DOTs are unaware At present, most DOTs do not have formal risk assessment
that they may occur and cause cost and schedule impacts. If and risk management programs, although FHWA has man-
they do occur, one or more parties generally own the problem dated that risk be analyzed on all major projects (i.e., those
and are responsible for the cost and schedule impacts. The costing more than $500 million) (FHWA 2007). However,
contractor is responsible for some problems and will have several state risk programs may be cited here. The Washing-
included the cost of those problems in the price; the owner is ton State Department of Transportation (WSDOT) has estab-
responsible for the remainder of the problems. In contracting, lished a policy that risk be analyzed on all projects costing
to preclude legal battles, decisions should be made beforehand more than $100 million (WSDOT 2005). The Florida Depart-
about who owns various problems. ment of Transportation (FDOT) has also recently established
Contingency has traditionally been used to account for all a risk assessment policy requiring qualitative risk assessment
potential unfixed problems collectively (through recognition along with value engineering for all projects costing less than
that some potential problems will occur and some will not), $100 million, quantitative risk assessment by internal resources
more so for problems related to cost and than for those related for projects from $100 million to $500 million, and quanti
to schedule, primarily on the bases of experience and judg- tative risk assessment by external resources for projects over
ment. However, such empirically based contingency has gen- $500 million. Other state DOTs (including California, Colo-
erally been inadequate, as evidenced by frequent overruns. rado, Iowa, Kentucky, Nevada, North Carolina, Pennsylvania,
Formal risk assessment and risk management can be used Texas, Utah, Virginia, and Wisconsin) have successfully applied
to deal more effectively with such potential problems by risk assessment and management on various projects.
Nonetheless, risk management to date has generally consid-
• Identifying and evaluating potential problems (risks) as early ered only project cost and schedule; the FHWA Risk Guide and
as possible in project development (i.e., the diagnosis); implementation materials are one example of this approach.
• Identifying, evaluating, selecting, and ultimately implement- Rapid renewal projects and their risks are generally even less
ing ways to deal with those risks, eventually including their understood than traditional DOT projects because they are
allocation, focusing on the more significant risks (i.e., the typically innovative (meaning, in general, that DOTs have less
treatment); and experience with them) and complex. Rapid renewal projects
• Evaluating the remaining risks (on the bases of the diag can also have extremely large potential cost and schedule
nosis and the treatment) to determine the appropriate impacts in some cases, like innovative project delivery of
contingency for each party (i.e., the prognosis). megaprojects; and practitioners need to consider both dis-
ruption and longevity in addition to cost and schedule.
The FHWA Risk Guide briefly summarizes risk assessment Thus, additional guidance (including tools and training) is
and risk management with respect to cost and schedule. needed to manage risk to improve performance of rapid
Under a previous contract, the authors of this R09 report renewal projects, as well as traditional projects.
developed tools and a training course to apply those risk
guidelines to relatively simple traditional projects; that work
Research Objectives
included successful testing on several actual projects (Golder
Associates 2008). The primary objectives of this study were (a) to address the
Fundamentally, risk management has two major objectives: general lack of understanding of risk and risk-transfer deci-
sions associated with the differing contracting approaches
• To understand uncertainty in project performance, includ- that can be used for rapid renewal, and (b) to develop practical
ing cost, schedule, safety, environmental impacts, and level guidance for the application of risk management methods to

5
the project development process in a manner consistent with following research tasks, which are discussed in more detail
the business practices of transportation agencies. in Chapter 2:
• Task 1: Develop a work plan. First the team evaluated gaps

Research Approach
in current risk assessment practice and guidelines with
The chosen research approach was developed by leveraging respect to rapid renewal projects. On the basis of those
team members’ theoretical knowledge and practical expertise gaps, the team developed a plan to fill the gaps and develop
in implementing formal project risk management on a large a complete guide for rapid renewal projects.
number of infrastructure projects. The approach provided a • Task 2: Develop a draft guide and related implementation
synergy of theoretical principles, practical tools for imple- materials. Using the gaps identified in Task 1, the team
mentation, and guidance for using the results in project risk conducted research on several parallel paths, including an
decision making. The key features of the proposed approach additional literature review, interviews with DOT person-
for developing and conducting this research are described nel experienced with rapid renewal projects, and internal
below. team brainstorming on potential problems associated with
The research team reviewed the FHWA Risk Guide and various aspects of rapid renewal projects. The team then
other relevant documents (especially those related to the consolidated the results from these various research paths
unique characteristics of rapid renewal projects) to deter- to develop a substantial checklist of rapid renewal risks and
mine where gaps exist in those guidelines in applying them to potential mitigation strategies. From this research, the
rapid renewal projects. The researchers then planned how to team developed the draft guide and associated implemen-
fill those gaps. They conducted research—based on a litera- tation materials in preparation for the pilot workshops.
ture review, surveys of FHWA and DOT staff, and theoretical • Task 3: Conduct pilot workshops. The draft guide and asso-
analysis—to identify the unique risks associated with rapid ciated implementation materials were applied to actual
renewal projects and possible ways to mitigate them. The rapid renewal projects. The team conducted training work-
team then developed a significantly expanded and enhanced shops with multiple transportation agencies.
Guide for the Process of Managing Risk on Rapid Renewal Proj- • Task 4: Finalize the guide and related implementation
ects and related practical materials that DOTs can apply. materials. Using information gathered during the two pilot
Development included testing the guide and implementation workshops and related feedback, the team finalized the
materials with two DOTs that had rapid renewal projects. guide and related implementation materials (including an
The team synthesized a set of work tasks that supported MS Excel template to model rapid renewal risks and report
the overall research approach. To accomplish the study objec- mean-value results). The final guide and materials were
tives efficiently, the research team used ongoing research submitted on February 15, 2011.
and development work on risk assessment and risk man • Task 5: Manage the study. This task included coordination
agement (including work by team members) and applied among research team members and the project officer, as
it to rapid renewal. The team defined and conducted the well as completing required status reports.

Chapter 2
Findings and Applications
Overview with revisions June 4, 2008), sufficient research was con

ducted to determine where significant gaps exist in the cur
Many transportation projects experience budget and sched rent risk guidelines and associated implementation materials
ule overruns and other types of undesirable performance with respect to application to rapid renewal projects. This
issues (e.g., excessive disruption of traffic, short life span), research included a literature review, interviews with select
which often result in other unfavorable outcomes (e.g., pub DOTs, drawing on research team experience, and review of
lic dissatisfaction, funding difficulties). These performance other related research projects. The gaps were documented
issues typically result from the occurrence of unexpected and a more-detailed plan developed to fill the gaps for rapid
problems—risks; yet it is possible for some risks to be antici renewal projects. The Task 1 report, with input from the Tech
pated, managed, and effectively mitigated. nical Expert Task Group and staff, was finalized on January 14,
Through literature search, interviews, and personal experi 2009. The Task 1 report is unpublished, but its various subtasks
ence, the R09 research team found that few state DOTs have are described in more detail below.
formal risk management programs to anticipate and pro
actively manage risks. The team also found no comprehensive
inventories (checklists) of rapid renewal elements, risks asso Subtask 1.1: Conduct Team Kick-Off Meeting
ciated with those elements, or actions for reducing those risks. At project initiation, the team conducted an internal project
This chapter describes the research approach introduced kick-off meeting. The primary objectives were to (a) clarify
in Chapter 1 and details the methodology. This chapter also project scope and approach, as well as establish communication
explains the findings of the research and how those findings methods and expectations; (b) share information; and (c) coor
were developed into the Guide for the Process of Managing Risk dinate related activities of the team members. The primary out
on Rapid Renewal Projects (the guide) and associated imple come of this meeting was a preliminary detailed work plan.
mentation materials. The research comprised five tasks. Each
task is described in the subsections that follow.
Subtask 1.2: Review the FHWA Risk Guide
and Other Background Documents
• Task 1: Develop a work plan.
• Task 2: Develop a draft guide and related implementation After the kick-off meeting, all team members reviewed the
materials. FHWA Risk Guide and considered other ongoing develop
• Task 3: Conduct pilot workshops. ments in their evolution. The team also reviewed other docu
• Task 4: Finalize the guide and related implementation ments that address various innovative contracting methods
materials. and specifications (e.g., NCHRP Report 451: Guidelines for
• Task 5: Manage the study. Warranty, Multi-Parameter, and Best Value Contracting) and
cost estimating (e.g., NCHRP Report 574: Guidance for Cost
Estimation and Management for Highway Projects During Plan-
Task 1: Develop a Work Plan
ning, Programming, and Preconstruction) (Anderson and Russell
The first task was to develop an initial detailed work plan for 2001; Anderson et al. 2006). This review inventoried and exam
the entire project consistent with the proposal. On the basis ined the distinct variables of the available construction and
of this initial plan (submitted January 13, 2008, and approved contracting methods (e.g., insurance, finance, and safety).

7
The team also reviewed the reports of the Accelerated Con 2002, the task force conducted the first two pilots of ACTT;
struction Technology Transfer program, which is discussed since then FHWA and AASHTO have carried forward the
further in the subsection below, Review of Accelerated Con effort as managers of the ACTT program.
struction Technology Transfer Program. Ultimately this prelim Although construction is in the ACTT title, the program
inary literature review was used to identify potential problems addresses all phases of project delivery. As the FHWA described
(risks) with various elements and possible ways to mitigate in its interim report on the ACTT program, “the goals of the
them (lessons learned)—the topic of Task 2. The content of program include minimizing the impact of ongoing highway
these documents is briefly summarized in an annotated bib construction on motorists and adjacent communities by
liography included in Appendix A. streamlining project schedules and containing costs while
Furthermore, the team proposed to survey and interview enhancing safety and improving quality.” Under the ACTT
FHWA and DOTs about their experience with risks in rapid program a corridor or project is selected because of its need for
renewal activities and their interest in being involved in this accelerated delivery; each one is reviewed in a 2-day workshop
study; these topics are discussed further in the subsection by experts from local, state, and federal agencies and private
below, Agency Surveys and Interviews. Similarly, team mem industries with a variety of skill sets relating to project accelera
bers’ experience with rapid renewal projects is summarized in tion. The multidisciplinary team of 20 to 30 transportation
the subsection below, Summary of Industry Experience, and experts works with local transportation agency professionals
in Appendix C (see also Table C.9). to evaluate all aspects of the project. Workshop participants
present feasible recommendations for reducing roadway con
struction time, enhancing safety, and delivering quality. The
Literature Review
whole ACTT process is ultimately aimed at enabling agencies
The research team reviewed available literature to identify to save time and money while reducing construction-related
information on risks related to rapid renewal projects. The congestion and improving work zone safety (FHWA 2004).
search included TRB resources, academic engineering data The findings of these project reviews were documented in
bases, academic business databases, American Society of Civil project reports, annual reports, training materials, and addi
Engineers (ASCE) and Project Management Institute (PMI) tional records (available on the ACTT website at http://www
publications, and selected transportation agency websites. .fhwa.dot.gov/construction/accelerated/). The costs of proj
The resulting annotated bibliography of that literature search ects examined ranged from $1 million to $3.5 billion. A rigor
appears in Appendix A and is largely taken from the results of ous review of these reports by the R09 research team yielded
NCHRP Project 8-60 (Molenaar et al. 2010) on the same sub a significant number of case studies that were later used to
ject, which was conducted by R09 research team member develop a preliminary inventory of rapid renewal methods, as
Keith Molenaar concurrently with this research project. well as some common recommendations for accelerating the
projects. The ACTT project analysis and resulting recom
mendations were organized by skill sets that offered a logical
Review of Accelerated Construction
framework for the inventory of rapid renewal methods. The
Technology Transfer Program
skill sets were the following:
The methodology for developing the inventory of rapid
renewal strategies and methods included a review of 25 case • Innovative contracting and financing;
studies from the Accelerated Construction Technology Trans • Roadway geometric design;
fer (ACTT) program; these cases represent the state of the art • Structures;
in rapid renewal construction. The area of rapid renewal has • Traffic engineering, safety, and intelligent transportation
been evolving in the highway industry for more than 10 years. systems (ITS);
FHWA and American Association of State Highway and • Environment;
Transportation Officials (AASHTO) have been at the fore • Construction;
front of the effort through their work on the ACTT program. • Coordination of rights-of-way (ROWs), utilities, and
In 1996, TRB released Special Report 249, which called for railroads;
formation of a strategic forum to accelerate innovation in the • Geotechnical aspects, materials, and accelerated testing;
highway industry. In response, the TRB Task Force A5T60 • Long-life pavements and maintenance; and
(now AFH35T) was formed in 1999 to facilitate removal of • Public relations.
barriers to innovation, advocate continuous quality improve
ment and positive change, encourage development of strate Figure 2.1 summarizes the skill sets that were applied to the
gies that generate beneficial change, and create a framework 25 ACTT projects. The construction skill set was represented
for informed consideration of innovation (FHWA 2004). In in all 25 ACTT workshops, which was not surprising given

Construction
Structures
Traffic Engineering/
Safety/ITS
Innovative Contracting/
Financing
Geotechnical/
Skill Sets
Materials/
Accelerated Testing
Public Relations
Environment
Roadway/Geometric Design
ROW/Utilities/
Railroad Coordination
Long-Life Pavements/
Maintenance
0 5 10 15 20 25
Number of Projects
Figure 2.1. Summary of skill sets used in 25 ACTT projects.
that rapid renewal projects generally involve construction with DOT respondents of the previous state-of-practice sur
under traffic. Other skill sets—structures; traffic engineering, vey. The second survey inquired about respondents’ experi
safety, and intelligent transportation systems; innovative con ence specifically with rapid renewal projects and the associated
tracting and financing; and geotechnical aspects, materials, risks of those projects.
and accelerated testing—were all represented in more than
80% of the workshops. These areas could also be considered State-of-Practice Survey
a primary focus of rapid renewal projects as they promote the Members of the R09 research team were simultaneously but
“get in, get out, stay out” philosophy of rapid renewal proj separately working under a research contract with TRB’s
ects. The long-life pavements and maintenance skill set was National Cooperative Highway Research Program (NCHRP).
represented in less than one-third of the projects. While long- Under this separate contract—NCHRP 08-60, Guidebook on
life pavements and ongoing maintenance are considerations Risk Analysis Tools and Management Practices to Control
in the rapid renewal approach, they did not seem to be as Transportation Project Costs—team members developed a
urgent as the other issues being addressed. state-of-practice survey to identify how different transporta
tion agencies and organizations determine contingencies and
manage risk-related costs throughout the process of project
Agency Surveys and Interviews development (hereafter referred to as the state-of-practice
An important part of the R09 research in both Task 1 and survey). The survey received responses from 48 of the
Task 2 was to obtain relevant information from state DOTs. 52 DOTs (50 states, District of Columbia, and Puerto Rico),
The R09 research team analyzed two surveys to complete the four Canadian agencies, and more than 130 individuals. Key
gap analysis. The first was a recent state-of-practice survey of results from this survey (those relating to risk management
various state DOTs on their risk management and cost esti for rapid renewal projects) were as follows:
mation programs, which was conducted under a separate
contract. The second survey analysis was conducted by team • Only one in five agencies had a formal, published definition
members under the SHRP 2 R09 contract, which followed up of contingency that was used consistently throughout the

9
estimating process. Given the importance of contingency amount and how that amount should be calculated. The
in managing budgets, this low proportion is unexpected, as results of the state-of-practice survey showed that only one in
is the fact that schedule contingency is generally even less six (8 of the 48) responding agencies had a formal, published
defined. definition of contingency. Without that formal definition,
• Only one in 10 agencies had a formal, published project risk agencies will have difficulty in consistently calculating appro
management policy or procedure. As risk management is priate contingency amounts or communicating the elements
an emerging (rather than established) trend in the highway that constitute contingency in an estimate.
sector, this low proportion is perhaps less unexpected than
the result of the previous item. Setting Contingency
The lack of a formal definition does not imply that agencies
disregard contingencies in their estimates. Approximately
Risk Management Practices
four of five agencies responding to the state-of-practice sur
and Application of Contingency
vey stated that they apply contingency in at least one phase of
Risk is inherent in every capital transportation project. One the project development process. Agencies set contingency
definition of risk is “the possibility that something unpleasant through use of three primary methods: (1) a standard pre
or unwelcome will happen.” In this study, risk is defined as “an determined contingency by percentage, (2) a unique project
uncertain event or condition that, if it occurs, has a negative contingency set by individual estimators, and (3) formal risk
or positive effect on a project’s objectives” (Project Man analysis and associated contingency.
agement Institute 2008). Risk management, then, involves The first method uses a standard predetermined contin
several specific steps: risk identification, assessment, analysis gency by percentage across all projects. Sixteen of the 48
(qualitative or quantitative), planning, allocation, monitoring, reporting state agencies employed some form of this method
and control. on their projects. Even when an agency applies a standard
While risk is inherent in every capital transportation proj contingency, it can make exceptions for various reasons,
ect, the state-of-practice survey found that only three of the including phase in the project development process, project
48 state agencies had a formal, published project risk man type, project complexity, market conditions, geographic
agement policy or procedures. California, Florida, and Wash region, and estimated project value.
ington had formal risk management procedures (Utah was in The second method has a unique project contingency that
the process of establishing such procedures). In those three the engineers, estimators, or project managers set. The major
states, it was clear how the risk analysis related to controlling ity of agencies responding to the survey stated that they used
cost escalation. Representatives from the three state agencies this method. When a unique project contingency is applied,
that had formal management procedures were interviewed many tools are used to determine the contingency, including
and case studies were written in NCHRP Report 658: Guide- engineering judgment, statistical analysis of historical data,
book on Risk Analysis Tools and Management Practices to Con- correlation of historical data with current market prices, and
trol Transportation Project Costs (Molenaar et al. 2010). In the assignment of contingency for specifically identified risks.
other states, the manner in which the agencies set their proj The third method uses formal risk analysis and its associ
ect and program contingency did recognize and incorporate ated contingency. The survey responses from agencies in Cali
risks into project estimates but not in a formalized risk man fornia, Maryland, and Washington indicated that they use a
agement procedure. Appendix C includes short profiles of combination of formal risk analysis and unique project con
how 10 states set contingency and analyze risk in projects. tingency. Furthermore, the FHWA response stated that it uses
Contingency is a future event that is possible but cannot be formal risk analysis. The research team knew of other agencies
predicted with certainty. In project estimates, contingency is the using formal risk analysis to set contingencies on a project-by-
tool that estimators and project managers use to address risk project basis (e.g., Colorado, Florida, Minnesota, New York,
and uncertainty. In this study, contingency is defined as the “esti and Texas), but the survey respondents did not enumerate
mate of costs associated with identified uncertainties and that use in their answers. Tools for determining contingency
risks, the sum of which is added to the base estimate to com through risk analysis include use of expected values through
plete the project cost estimate. Contingency [funds are] statistical analysis of historical data for assigning cost to risks,
expected to be expended during the project development and use of expected values through engineering judgment for
construction process” (Anderson et al. 2009). assigning cost to risks, Monte Carlo or simulation methods,
The transportation industry generally agrees that contin influence diagramming, and probability or decision trees.
gency is necessary but disagrees significantly about which This third method, formal risk analysis, was a primary focus
risk-associated costs should be included in a contingency of this research and is explored in detail in the guide.

10
Contingency at Project Level or Program Level state DOTs to specifically address rapid renewal risks (here
State agencies can apply contingency at an individual project after referred to as the rapid renewal survey). This draft sur
level or a program level. Applying contingency at a project vey was developed to be as short and focused as possible to
level determines a contingency amount for an individual proj encourage participation. The survey was later revised and
ect cost estimate on a project-by-project basis. Applying con streamlined. The actual rapid renewal survey was conducted
tingency at a program level spreads contingency across projects as part of Task 2 and is further discussed in the Task 2 sub
(e.g., as set-aside amounts in a state transportation improve section titled Research.
ment program). Depending on the phase of project develop
ment, state agencies can choose to apply contingency at one
AASHTO Subcommittee on
or both of these levels.
Construction Annual Meeting
Over half of state agencies in the state-of-practice survey
apply contingency at a project level for all three development On the recommendation of the SHRP 2 R09 program officer,
phases. Only one state agency applied it at solely a program a member of the research team attended the AASHTO Sub
level, regardless of developmental phase. Just less than one in committee on Construction (SOC) annual meeting in San
five agencies used a combination of project and program con Antonio, Texas, in August 2008 to discuss AASHTO’s assis
tingencies (19% at the planning phase and the programming tance in conducting the rapid renewal survey. The SOC pub
and preliminary design phase and 16% at the final design lishes the guide specifications for construction and coordinates
phase). The remaining responding agencies do not apply con the practices of the several member DOTs regarding construc
tingency in their estimates (26% at the planning phase, 21% tion procedures. It hosts a forum to exchange information on
at the programming and preliminary design phase, and 21% construction procedures and endeavors to reduce construc
at the final design phase). tion cost, promote quality in construction, provide coordi
nated plans and specifications, mitigate traffic impacts,
advocate environmental sensitivity in construction, promote
Range Estimates Versus Point Estimates
safety for workers and travelers, and promote the best prac
One method of communicating estimates is as a single number tices for administering construction contracts with all stake
(a point estimate). Point estimates can include a stated contin holders (AASHTO 2013). The SOC annual meeting brought
gency to help convey uncertainty. Another method of convey together representatives from the 52 member departments of
ing estimate uncertainty is through a range estimate, which SOC to discuss the committee’s mission and agenda; 178 peo
may include simple best-case and worst-case points or may be ple were in attendance. (The SOC annual meeting website is
shown graphically with a probability curve (probability mass located at http://construction.transportation.org/?siteid=
function). Depending on the project phase, one method might 58&pageid=732).
be considered more appropriate than the other. Table C.3 in To assist the R09 research team in developing the rapid
Appendix C summarizes the use of ranges by agencies to com renewal survey, the vice-chairman posed the following two
municate estimates. questions relating to rapid renewal risks during a general
The state-of-practice survey that was developed under the question-and-answer session of the SOC conference:
NCHRP 08-60 research project provided valuable informa
tion for the R09 research team. It clearly demonstrated the 1. Does your organization have an established policy regard
need for guidance on risk management and estimation of ing rapid renewal?
contingencies. It highlighted common tools currently being 2. Does your organization have established procedures for
used by agencies. When mapped against the literature review, risk management?
the survey also revealed tools for risk analysis and risk man
agement that are absent from the transportation sector. None of the DOTs that responded had an established policy
Finally, the survey pointed to the best agencies to interview related to rapid renewal. Despite that initial negative response,
in the next phase of the R09 research. For a more-detailed subsequent discussions found that a number of states had
description of the state-of-practice survey, see Appendix C. innovative contracting groups or leaders within their agencies
that address accelerating construction and conducting con
struction under traffic. The Utah DOT used construction man
Follow-Up Survey
ager at risk, design–build, accelerated bridge construction,
To narrow the focus of the research to rapid renewal projects, and other innovative methods; and it had policies covering
the R09 research team developed a focused, follow-up sur the circumstances under which the use of innovative project
vey to the recent state-of-practice survey. It was developed for delivery is appropriate (e.g., to accelerate projects through

11
rapid renewal techniques). California used design sequencing, was helpful in keeping the research team current with the
A + B bidding, and lane rental. Washington used extensive state of the practice in rapid renewal techniques and risk
design–build project delivery. Finally, Florida used all the alter management practices. However, on discussing the research
native contracting approaches already mentioned, plus public- topic in the general question-and-answer session at the con
private partnerships. It also used advanced techniques with ference and further discussing the topics informally with
respect to accelerating construction through innovative con conference attendees, the research team concluded that an
tracting methods. additional follow-up survey would not yield significantly new
The second question regarding established risk manage results. In summary, a review of existing SOC documents, the
ment procedures confirmed the state-of-practice survey con current state-of-practice survey, and the team’s rich database
ducted under NCHRP 08-60 by members of the research of risks from previous analyses provided the information
team. Only California, Washington, and Florida confirmed required for completion of Task 1.
having formal risk management procedures. Utah stated that
it had risk procedures regarding the selection of insurance
Summary of Industry Experience
but not relating to risk management for scope, cost, and
schedule. The Utah DOT is currently in the process of estab Several R09 research team members have extensive experi
lishing a risk management program (most likely modeled on ence in conducting risk assessment and risk management for
the Washington program). projects with rapid renewal elements (see the Appendix C
Subsequent discussions with SOC members also identified section Summary of Industry Experience and Table C.9 for a
a current report relating to the subject of rapid renewal: summary of the rapid renewal projects in which R09 team
Primer on Contracting for the Twenty-first Century (AASHTO members have been involved). Several members of the team
2006). This report covers much of what was being addressed worked with state DOTs including Florida, Iowa, Utah, and
in the research team’s proposed survey. As a result, it was Washington on previous risk assessments. The team drew on
determined that the survey could be further streamlined. The this experience to identify categories of rapid renewal risks, as
research team later reviewed this report for rapid renewal well as potential risk-mitigation strategies.
techniques and related risks.
Review of Existing Risk Management Guidelines
Interviews
During the SOC session, volunteers were solicited for inter As discussed in Chapter 1, the Guide to Risk Assessment and
views. Representatives from the DOTs of California, Florida, Allocation for Highway Construction Management (Risk
Utah, and Washington were identified as candidates for inter Guide) developed in 2006 by FHWA provides only an over
views or case studies on the basis of their policies and proce view and is not a how-to document (Molenaar et al. 2006).
dures on risk management and their use of innovative Thus, training materials and tools for implementing the Risk
contracting methods relating to rapid renewal. Several of Guide were developed (Golder Associates 2008); these tools
these DOTs subsequently attended pilot workshops in Task 3. and materials were successfully applied in late 2007 and early
Only Utah could provide a brief interview during the con 2008 to projects for four state highway agencies: Colorado,
ference. The director of construction and materials at the Florida, Texas, and Virginia. The development of implemen
Utah DOT was interviewed. Utah has an aggressive program tation materials involved significant expansion of various parts
for accelerating construction and using rapid renewal con of the Risk Guide, although actual revision of the Risk Guide
cepts. The state is actively using construction manager at risk, was not included. The implementation materials can be
design–build, accelerated bridge construction, and other viewed as products developed to support the implementation
innovative methods. The director had not attended any risk of the original FHWA guidelines.
analysis workshops, but he said that the state had conducted The newly developed implementation materials deal
these workshops in the past. Utah does have stated policies with cost and schedule risks associated with completing
for when to use innovative project delivery. A primary factor a highway construction project through traditional deliv
in deciding when to use innovative delivery relates to acceler ery methods (such as design–bid–build, with one construc
ating projects through rapid renewal techniques. tion contract package), although they can apply to various
ways of completing a project (e.g., accelerated construction
Conclusions methods). However, rapid renewal projects should con
The AASHTO SOC 2008 annual meeting assisted the team sider more than just cost and schedule risks associated with
in completing Task 1 of the research and identifying state completing a highway construction project (e.g., risks of
highway agencies for Task 3 workshops. The AASHTO SOC disruption and durability consequences) and can involve

12
nontraditional methods of project delivery (e.g., design– Once the Risk Guide has been updated to cover traditional
build), as well as accelerated construction methods. More projects, the unique aspects of rapid renewal (especially
over, less experience and understanding—and often more expanded project performance objectives and different proj
risk—are generally associated with some of the accelerated ect delivery methods) would be covered primarily in a new
and nontraditional methods being considered. If agencies Appendix G.
fail to evaluate these methods appropriately, the consequences Similarly, the currently recommended changes to the asso
might be poor decisions and poor project results. Thus, team ciated implementation materials are summarized in Appen
members assessed the applicability of the Risk Guide and dix C, Table C.11. In essence, for traditional projects, no changes
related materials to rapid renewal projects and recom are needed. For rapid renewal projects, the unique aspects
mended ways to expand them (see Tables C.10 and C.11 in of such an application (especially expanded project perfor
Appendix C). mance objectives and different project delivery methods)
would be covered in a new Module 8 and by modifications to
the software training module.
Subtask 1.3: Identify Additional
Material Needed (Gaps)
Subtask 1.4: Develop Report and Plan
On review of the guidelines and related information, the proj (with Input from State DOTs)
ect team identified additional elements needed to develop the
Guide for the Process of Managing Risk on Rapid Renewal Proj- The research and discussions with various experts made clear
ects. The team found that generally the necessary tools and that the scope and objectives of rapid renewal projects had to
methods already existed. However, a database of significant be more broadly but more carefully defined for the R09 proj
risks and feasible risk mitigation for accelerated construction ect. The research scope included accelerated construction,
and innovative contracting methods and specifications did planning, and maintenance methods, as well as accelerated
not yet exist, especially for some of the newer methods. project delivery methods (e.g., design–build and public-private
Recommended expansions and revisions of the FHWA Risk partnerships). Furthermore, the project needed to address
Guide for both traditional and rapid renewal projects are sum additional project performance objectives, including mini
mal disruption (during construction) and maximum longevity
marized in Appendix C, Table C.10. In essence, for traditional
(considering cost and disruption of operations, replacement,
projects, the Risk Guide first needs to be updated to reflect the
and design life), as well as minimal planning–construction cost
expansion associated with development of the implementa
and schedule.
tion materials. Such updates include the following:
The team found that the necessary tools and methods for
managing risk on accelerated projects already existed, although
• Add a new chapter on baselining the project (identifying
the ones needed for evaluating rapid renewal projects were
and documenting key assumptions, scope, delivery strat
not adequately described in the FHWA Risk Guide. The team
egy, and baseline costs; developing the flow chart and base also found that a database of significant risks and feasible risk
line schedule). This would be the new Chapter 2. mitigation for rapid renewal projects was the item most in
• Add a new chapter on implementation (how to implement need of development. In consultation with various DOTs that
the guidance in the new Chapters 2, 3, 4, and 6). This chap expressed interest in Subtask 1.2 (review of the guidelines and
ter would reference the training workshop slides and the other background documents), the team developed a detailed
risk-management spreadsheet template. This would be the plan for filling the gaps.
new Chapter 9. Once the needed developments had been identified, the
• Modify/update the existing Chapters 1–8 as needed based project team prepared a draft report that (a) documented the
on work done for the short-course development. These review of the guidelines, other documents about accelerated
would be the renumbered Chapters 1, Chapters 3–8, and construction and innovative contracting methods and speci
Chapter 10. fications, and the survey of agencies; (b) identified gaps in the
• Modify/update the existing Appendices A–D, glossary, and guidelines that needed to be filled to cover rapid renewal
references/bibliography as needed based on work done for projects adequately; and (c) presented a plan for filling those
the short-course development. This would include adding gaps and thus developing a complete guide for rapid renewal
case studies and a more complete generic risk checklist. projects. Specific recommendations for expanding the exist
• Include the training workshop PowerPoint slides (printed ing guidelines and implementation materials appear in
with Notes pages) as the new Appendix E to the Risk Guide. Appendix C, Table C.10.
• Include the risk-management spreadsheet template as an On the basis of the gap analysis, the team determined that a
electronic attachment (Appendix F). new, more-detailed guide for risk management—specifically

13
addressing the unique features of rapid renewal projects (as Subtask 2.1: Research
well as traditional projects)—was required. Also needed were
The key elements of this research included the following:
new tools and training materials for state DOTs to use inter
nally, without external assistance, on relatively simple projects.
• Establishing appropriate rapid renewal project perfor
The development of the guide and associated materials are
mance objectives and related measures;
discussed further in the next section.
• Developing inventories of rapid renewal methods, risks,
and feasible management actions;
Task 2: Develop a Draft Guide • Establishing an appropriate risk management process;
and Implementation Materials • Developing a template for documenting assessments (also
forms) and automatically calculating performance mea
After SHRP 2 approved the detailed work plan, the focus shifted
sures, consistent with that process; and
to Task 2: developing the guide and accompanying implemen
• Developing the guide, training materials, and other work
tation materials. To understand the risks (i.e., potential prob
shop materials.
lems, potential opportunities, or both) of rapid renewal, the
research team first developed an inventory of rapid renewal The main effort of Task 2 involved the development of a
strategies and methods. That inventory informed the risk man checklist of risks (or categories of risks) and associated risk
agement process with the aspects unique to rapid renewal proj mitigation for rapid renewal projects, in particular, innova
ects and their associated risks—in contrast to projects that tive contract methods and specifications.
follow the more traditional linear project development process In general, methods and tools for identifying and assessing
and methods. The intent was to further expand on the FHWA risks, as well as for identifying and evaluating risk mitigation,
Risk Guide and related implementation materials to cover the already exist. But the specific nature of the risks associated
unique aspects of rapid renewal projects. The research team with rapid renewal projects and how they are handled tends
addressed these rapid renewal features: to be unique and less understood—or at least less well com
municated within DOTs and the contracting community.
• Considering additional project performance measures in
This, in turn, required a thorough understanding of the con
evaluating a project (e.g., disruption and longevity, as well tractual relationships in rapid renewal projects and of the
as construction cost and schedule); specifications appropriate to those relationships. Both expe
• Considering the various potential project delivery meth rience with such contracting methods (which is generally
ods (e.g., design–build, contractor-financed), as well as limited) and with theoretical analysis (especially for newer
accelerated construction methods; and methods) were required to identify risks and, even more so,
• Understanding the risks typically associated with the vari risk mitigation.
ous potential project acceleration methods (e.g., acceler The first steps in this process were to define the various
ated bridge construction, accelerated permitting) and how performance measures to be considered and to identify the
they might best be managed. various potential project delivery methods and project accel
eration methods that might be proposed for any given proj
Task 2 consisted of two basic subtasks: ect. The next logical steps were to identify the risks that might
be associated with each of the potential project acceleration
• Subtask 2.1: Research (on several parallel paths) to identify methods, and how they should be assessed; and to identify
the various unique aspects of rapid renewal projects, the possible ways to manage those risks, and how they should be
risks associated with those aspects, and feasible ways to managed.
manage those risks, considering the various project perfor This research to identify the risks and their mitigation
mance objectives (e.g., minimum schedule, minimum capi involved the following three parallel approaches:
tal cost, minimum disruption, and maximum longevity).
• Subtask 2.2: Development of the draft guide and associated 1. An additional literature review to supplement the one con
implementation materials that incorporate the above ducted under Subtask 1.2, including further development
research. of an annotated bibliography focused on identification of
risks and risk mitigation for rapid renewal projects. The
Research was completed and submitted to SHRP 2 on Sep analysis of the 25 ACTT project reports conducted in Sub
tember 1, 2009. The draft guide and associated implementa task 1.2 yielded some common findings across the recom
tion materials were completed and submitted to SHRP 2 on mendations for accelerating the project. Although it might
October 29, 2009. be argued that not all of these recommendations are unique

14
to rapid renewal (e.g., brand the project, consider owner- management actions that their agencies employed. Table 2.2
controlled insurance programs) or that some are actually presents the risk categories and risk management actions
risk management methods (e.g., require a pavement war named; a summary of the interviews is also available in
ranty), the research team synthesized these recommenda Appendix D.
tions into a preliminary rapid renewal inventory.
2. A theoretical approach based on the expert judgment of
Subtask 2.2: Development of Draft Guide
team members used brainstorming to identify all the poten
tial problems that could conceivably arise with each innova Once the general risks, risk mitigations, and their contribut
tive contracting method. Then team members identified ing factors were identified, the process of developing the final
feasible ways to mitigate each of those problems using their guide began. The team generated an outline for the guide and
judgment; this included identification of the factors that then proceeded to develop an annotated outline for the guide
affect the severity of risk and the cost-effectiveness of risk and associated implementation materials. (The investigators
mitigation. The theoretical approach involved an intensive found this to be an important step in the research process.)
2-day workshop during which the team members identified Development of a new, more-detailed guide and related
contractual relationships and their effect on risk. implementation materials to appropriately fill the needs
3. Interviews with DOT personnel helped refine the list of identified in the gap analysis included development of the
potential problems and mitigation approaches (see following major components:
Appendix D) to validate the problem list and ensure iden
tification of any additional mitigation approaches. (The • Risk management process;
interviews are discussed further in the next subsection, • Rapid-renewal project performance objectives;
Interviews with DOT Personnel.) • Rapid renewal methods, risks, and mitigation inventories;
• Risk management planning methods, tools, and guidance;
The results of these three approaches was a list of risks (or
and
categories of risks) related to each dimension of rapid renewal • Risk management program guidance.
and innovative contracting methods with feasible risk miti
gation, as well as factors that affect risk severity and risk miti
gation cost-effectiveness. Risk Management Process
An inventory of rapid renewal strategies and methods, as
The research team developed a formal risk management pro
well as lists that present more-detailed descriptions of the
cess to improve understanding of rapid renewal projects and
recommendations, appear in the Guide for the Process of Man-
to optimize project performance, especially by anticipating
aging Risk on Rapid Renewal Projects (http://www.trb.org/
and planning for potential problems (risks). This process,
Main/Blurbs/168369.aspx). Table 2.1 provides an overview of
which is a significant expansion of a previously developed
the rapid renewal inventory; the guide provides more-
risk management process for non–rapid renewal projects
detailed tables of rapid renewal dimensions, methods, risks,
(and for which the expanded process is also applicable), con
and mitigations.
sists of a well-defined series of steps that are sequential and in
some cases iterative (see Figure 2.2). Agencies must follow the
Interviews with DOT Personnel steps in such a way to ensure compatibility and consistency of
Additional surveys were conducted to support the develop those steps and to ultimately ensure adequate accuracy and
ment of inventories of rapid renewal methods, risks, and fea defensibility of results (“adequacy” depends on how the results
sible management actions. A draft survey for DOTs was will be used), as efficiently as possible.
developed under Task 1 and revised under Task 2 to more effi The steps in the risk management process include the
ciently solicit information from DOTs on rapid renewal meth following:
ods and their risks and possible mitigation (see questionnaire
in Appendix D, Figures D.1 and D.2). The team completed 1. Structuring. Define the base project scenario (including
interviews with five DOT personnel. The interviews solicited the relevant project performance measures of cost, sched
details on accelerated construction projects from the Utah ule, and disruption through construction, postconstruction
DOT, Center for Transportation Research at the University of longevity, and trade-offs among them), against which risk
Texas at Austin, Texas DOT, California Department of Trans and opportunity can subsequently be identified, assessed,
portation (Caltrans), and Colorado DOT (see Appendix A for and eventually managed.
agency contact information). Interviewees explained some of 2. Risk identification. Identify a comprehensive and non-
the main risks faced during rapid renewal projects and the risk overlapping set of risks and opportunities relative to the

Table 2.1. Rapid Renewal Inventory Overview
Geotechnical Right-of-Way/
Traffic Innovative Materials/ Roadway/ Utilities/ Long-Life
Engineering/ Contracting/ Accelerated Geometric Railroad Pavements/
Construction Structures Safety/ITS Financing Testing Public Relations Environment Design Coordination Maintenance
• Closures • Prefabrication • Advance • Alternative • Subsurface • Team • Master planning • Alternate • Advance • Life-cycle
• Preliminary • Component planning financing exploration integration • Context- access right-of-way design
work/staging reuse • Alternate • Project delivery • Walls • Single-point sensitive • Alternate planning • Performance
• Project • High- routes • Procurement • Pavements communication solutions geometrics • Early utility indicators
administration performance • Alternate • Contract • Alternative • Additional • Comprehensive • Advance location • Long-life
streamlining materials modes payment materials investment scoping roadwork • Common materials
• Construction • Integral • Improved • Project • Advance utility • Maintenance
operations designs physical • Warranties • Intelligent branding permitting crossings involvement
separation compaction • Early railroad
• Standardized • Coordinated • Stakeholder coordination
design emergency • Alternative • Material awareness
response insurance testing
• Construction • Signage and • Advance • Performance
placement signalization contract measurement
• Temporary • Closures packaging
structures • Bonding/
performance
• Long-life • Work zones securities
structural
design
Note: ITS = intelligent transportation system.
15
16
Table 2.2. Risk Categories and Risk Management Actions
Risk Categories Risk Management Actions
Potential failure of innovative equipment Innovative delivery methods (design–build, CMR)

Coordination with utilities/stakeholders Facilitated partnering sessions with utility partners
Accelerated bridge design Use of performance specification for bridge design
Off-site prefabrication of bridge elements Lane rental provisions
Delayed-start contract provisions to prepare for in-traffic work before starting Incentives/disincentives
Coordination risk of maintenance of traffic and utilities Extensive public outreach
Public relations Hiring a general engineering consultant to coordinate contracts
Management of traffic Focus on maintenance of traffic and utilities
Failure of innovative pavement materials Incentives/disincentives at contract coordination points
Agency unfamiliarity with the process Early and continuous stakeholder interaction and communication
ROW acquisition issues Extensive mix design research and off-site testing
Agency training
Augmentation of ROW staff
base (i.e., scenarios that might occur to change the base performance measures and thus severity. Document the
project performance). In addition to first brainstorming risk factor assessments in the project risk register.
and then performing project analysis to identify risks, use 4. Risk analysis. Assess and analytically combine the uncer
checklists of common risks (developed as part of this tain base and risk factors to determine the uncertain proj
research) to ensure completeness. Document the set of ect performance measures (e.g., ultimate escalated project
risks and opportunities at the start of the project in a risk cost), as well as changes in those measures (e.g., combined
register (a record in which all project risks, including using trade-offs, as a measure of severity) associated with
information such as risk probability, impact, and counter each risk. The quantification of the uncertainty in the
measures, are listed). performance measures is expressed as correlated proba
3. Risk assessment. Assess and prioritize each of the risks and bility distributions and calculated as a function of subjec
opportunities in the risk register on the basis of severity. tively assessed uncertainties in (and correlations among)
Generally this requires (a) subjectively assessing the rele the base and risk factors. To conduct this quantification
vant risk factors (i.e., the probability of a scenario occurring appropriately requires that the analyst have specialized
and the impact if the scenario occurs), either qualitatively skills.
(e.g., high versus low, when these descriptors are quantita 5. Risk management planning. Identify and evaluate possible
tively defined by ranges of values) or quantitatively (in rela ways to reduce risks proactively, focusing on those that are
tion to mean values or, for quantitative risk analysis, full most severe. Evaluate each possible action in relation to its
probability distributions); and then (b) analytically com cost-effectiveness, considering changes in both base (e.g.,
bining the risk factors to determine changes in project additional cost) and risk (e.g., reduced probability) factors,
and select those that are most cost-effective. Consider sub
sequently reanalyzing the project performance measures
Project for this risk reduction program, including quantification
Scope/Strategy/
Conditions of uncertainty, on the basis of which appropriate budgets
Risk and milestones can be established (e.g., to achieve a specified
Management Structuring level of confidence). As part of these budgets and milestones,
Implementation
establish contingencies (additional funds and schedule float,
as well as recovery plans) and procedures to control their
use. Document all in the risk management plan.
6. Risk management implementation. Implement the risk man
Risk
Management
Risk agement plan as the project proceeds, including (a) moni
Identification
Planning toring the status of risk reduction activities and changes in
risk (whether from risk reduction or simply changes in
project development, conditions, and information) and
Risk Risk
(b) monitoring budget and milestones, especially with
Analysis Assessment respect to contingencies. This monitoring might involve
periodic updates (iterate Steps 1 to 5) at regular intervals or
Figure 2.2. Risk management process. at major milestones or changes. For example, contingencies

17
might be reduced as engineering reports or designs are 44 Longevity [net present value dollars (NPV$) at the end
completed and risks are avoided or reduced. of construction] and the value of changing longevity (in
YOE$/NPV$).
Rapid Renewal Project Performance Objectives
Combined project performance appropriately merges all
As previously discussed, the performance objectives for rapid the various project performance objectives (on the basis of
renewal projects had to be expanded beyond simply mini formal methods of decision analysis). Thus, changes in com
mizing construction costs and schedule. The expanded objec bined project performance can be used to define the severity
tives were to (1) minimize cost, time, and disruption of traffic of the various risks; on the basis of the relative severities, risks
(user costs) during construction; and (2) maximize longevity should be prioritized for managing and for gaining the ben
(i.e., minimize costs and disruption of traffic associated with efits of such management.
operations and maintenance, as well as with ultimate replace
ment or decommissioning; and maximize the time from the
Rapid Renewal Methods, Risks,
end of construction to replacement or decommissioning).
and Mitigation Inventories
Metrics, or performance measures, were defined by the
research team for each of the objectives, as well as for the com Comprehensive inventories of rapid renewal methods, risks
bination of objectives, as follows: associated with those methods, and potential ways to pro
actively reduce each of those risks were developed by the
• Time through construction is expressed as the project oper research team.
ations date, which requires an analysis of the schedule
through construction. 1. A comprehensive hierarchy of rapid renewal methods was
• Cost through construction is expressed as the total inflated developed by reviewing FHWA ACTT workshop reports
[year-of-expenditure (YOE)] construction cost, which (including those for 25 workshops and other information
requires a construction cost–loaded schedule (i.e., un- such as training materials) and by interviewing knowledge
inflated construction cost estimate, schedule, and alloca able DOT personnel, supplemented by personal experience
tion of cost items to schedule items) and inflation rates. of the research team (see Appendix C and Appendix D).
• Disruption through construction is expressed as total equiva 2. A comprehensive set of risk categories for each rapid
lent lost person-hours, which requires a traffic disruption renewal method was developed, primarily on the basis of
analysis (i.e., duration of disruption, average number of the personal experience of the research team and supple
users affected, and average delay per user) and a business mented by interviewing knowledgeable DOT personnel
disruption analysis (if needed, for example, because it is not (see Appendix D). The full risk checklists are available in
mitigated or translated to equivalent lost person-hours). Appendix B of the guide (Golder Associates et al. 2014).
• Longevity is expressed as total equivalent postconstruc 3. A comprehensive set of management actions for each risk
tion (i.e., operations and replacement) discounted cost category for each rapid renewal method was developed,
[or net present value (NPV), to the end of construction], primarily on the basis of the personal experience of the
which requires uninflated cost for operations (i.e., sched research team and supplemented by interviewing knowl
ule for operations and average cost per year) and for edgeable DOT personnel. See Appendix B of the guide for
replacement, disruption during operations (i.e., schedule the full list of rapid renewal risk categories and potential
for operations and average number of days disruption management actions.
per year) and during replacement, value of disruption
(as of the end of construction), and net discount rate In evaluating a project, these inventories should be used
after construction. after brainstorming to help ensure that the risk register and
• Combined project performance is expressed as equivalent the risk management plan have considered all conceivable
total inflated cost [in year-of-expenditure dollars (YOE$)], options and potential problems.
which requires inclusion of these elements:
44 Cost through construction (in YOE$);
Risk Management Planning Methods,
44 Time through construction (date) and the value of
Tools, and Guidance
changing the operations date (in YOE$/month) from a
specified milestone (date); In addition to rapid renewal performance objectives and
44 Disruption through construction (equivalent lost person- inventories, successful and efficient implementation of the
hours) and the average value of lost person-hours (in risk management process required development of various
YOE$/h); and methods and tools, as well as guidance for their use.

18
For successful project structuring the research team devel they are most likely to occur and developed the structure of
oped the following: an appropriate project risk register.
For successful risk assessment, the team discussed available
• A comprehensive but efficient format or outline for ade methods and tools for assessing the severity of identified
quately describing the relevant aspects of the subject risks. The team developed methods, tools (e.g., an MS Excel
project. template), and guidance for calculating mean unmitigated
• Standard simplified project flowcharts that graphically (before additional risk management) project performance
depict the sequence of major project phases, specifically for and its sensitivity (risk severity), using the same generic proj
relatively simple traditional (design–bid–build) and nontra ect performance model as discussed above but considering all
ditional (e.g., design–build) project delivery. See Figure 2.3 the identified risks and their severity, as well as the base. The
for nontraditional project delivery; the project flowchart for team also developed methods, tools (e.g., forms and an MS
a traditional project is similar but more simple. Excel template), and guidance for assessing mean risk inputs
• A generic project performance model to calculate (e.g., (either values or ratings) for a project.
using an MS Excel template) the various project perfor For successful risk analysis, the team discussed available
mance measures (such as project schedule, escalated project methods and tools, and developed guidance for conducting
cost and project disruption through construction, and appropriate probabilistic performance and sensitivity analy
postconstruction longevity, as well as a combined perfor sis, including assessment of probability distributions for (and
mance measure), as a function of various inputs (e.g., cost, correlations among) base and risk inputs for a project. This
schedule, disruption factors, and trade-offs), which must be project focused on a qualitative assessment of risk; there are
assessed separately for each project consistent with the rel tools available for quantitative risk assessments. Special
evant simplified project flowchart. The base (exclusive of methods and tools required for this risk analysis were previ
risk) project performance is determined by implementing ously developed by the authors outside this research project.
the model with base input values; the mean (probability- For successful risk management planning, the researchers
weighted average) project performance is determined developed the following:
approximately by implementing the model with mean
input values. • Methods, tools (e.g., forms and an MS Excel template), and
• Methods, tools (e.g., forms and an MS Excel template spe guidance for identifying and evaluating possible risk man
cifically for relatively simple rapid renewal projects), and agement actions, including cost–benefit analysis for evalu
guidance for assessing mean base inputs for a project. ating proactive individual risk reduction alternatives. In
addition they developed a checklist for possible risk reduc
For successful risk identification, in addition to developing tion actions (see the guide).
a risk checklist, the team developed methods, tools (e.g., • Methods, tools (e.g., an MS Excel template), and guid
forms and an MS Excel template specifically for relatively ance for calculating mean mitigated project performance
simple rapid renewal projects), and guidance for identifying and its sensitivity, using the same generic project per
a comprehensive and nonoverlapping set of project risks formance model as discussed above, but considering the
(including opportunities relative to the base scenario). The cost-effectiveness of the selected set of risk management
team also categorized risks by the project phase during which actions, as well as the risks and the base.
Notes: <x> = lag

Enviro D/B Final E – lag (remaining) after finish of ROW Fund to finish
Permits Design of ROW/Utilities/RR
F – lag (overlap) from finish of ROW/Util/RR to start
of Construction
Time <C> <A> <B> <G> <H>
Enviro 3
Proc, Procure- D/B Con- Opera- Replace-
Planning Scoping Prelim ment struction
4
tions
5
ment
Design
Notes: 1,2,3 = funding 1 <K> A – lag (remaining) from finish of Environmental Permits
2 <E> <J> <I>
4 = project delivery <D> to B – lag (remaining) to finish of Procurement
<F> C – lag (remaining) from finish of Environmental Permits to D –
5 = replacement lag (remaining) to finish of ROW/Util/RR
ROW, G – lag (non-overlap) after start of Final Design to start of Construction and H – lag
Enviro Proc = Environmental Process (remaining) after finish of Final Design to finish of Construction
Util, RR = Utilities, Railroad Util, RR I – lag (remaining) after finish of ROW/Util/RR to finish of Construction
J – lag (remaining) from finish of ROW/Util/RR to K – lag (remaining) to finish of
Procurement
Figure 2.3. Design–build (D/B) project phases.

19
• Contingency and recovery analysis on the basis of miti DOT. Such a program consists of the following elements: pol
gated project performance analysis (either quantitative icy, procedures, organizational structure (roles, responsibili
risk analysis or the approximate mean value approach for ties, authority, and resources), and an information network
relatively simple rapid renewal projects) and desired levels (for both gathering and distributing information).
of confidence (target percentiles). A key requirement of a risk management program is skilled
• Content requirements (i.e., an annotated outline) for an staff who can organize workshops; lead workshops and sub
appropriate project risk management plan. sequently conduct analyses on relatively simple projects;
write reports and plans, and monitor and update the risk reg
For successful implementation of risk management, the team ister as risks arise and are addressed; and on complex projects,
developed methods, tools (e.g., forms and an MS Excel tem supervise others who are leading workshops, conducting
plate), and guidance for monitoring and updating the risk man analyses, and the like. A 2-day course was developed to train
agement plan as the project proceeds, especially the following: DOT staff to be capable of accomplishing these tasks; the
course was supplemented by, essentially, an apprenticeship
• Base project performance (e.g., as contracts and change program in which staff members become increasingly profi
orders are established and actual costs and schedule are cient and ultimately independent. The training course, as well
monitored); as the application of the methods and tools for risk manage
• Risk register (e.g., changes in severity of the risks, such as
ment planning, were successfully tested and finalized during
“retirement” of risks if they have not occurred by the end two pilot workshops (as discussed in the next section).
of a particular project phase); Once the Guide for the Process of Managing Risk on Rapid
• Proactive risk reduction plans (e.g., their status, including
Renewal Projects and associated implementation materials
actual implementation costs and effectiveness); and were expanded and appropriately revised, they were submit
• Contingency and recovery plans (e.g., their status, includ
ted to the SHRP 2 Expert Task Group (ETG) for review and
ing remaining capacity and changes in requirements).
approval. After receiving ETG approval, the team completed
and submitted all the materials to SHRP 2 for review and
In addition to development of a formal risk management
approval. The subsequent pilot workshops (see Task 3) were
process and set of performance objectives for rapid renewal
conducted to test the guide and implementation materials,
projects, the researchers developed the following tools:
after which the research team refined the material based on
• An appropriate generic overview of the risk management feedback and lessons learned (under Tasks 3 and 4).
process for a risk facilitator to present at the beginning of a
workshop, specifically for a relatively simple rapid renewal Task 3: Conduct Pilot
project. Workshops
• A suitable set of paper forms to guide a risk facilitator
through the various methods and tools, specifically for The scope of Task 3 of this research project included conduct
relatively simple rapid renewal projects. ing two pilot workshops with state DOTs that used the draft
• An MS Excel workbook template (with a comprehensive guide and associated implementation materials. Feedback
user’s guide) to automatically document the inputs (con from these workshops would be the basis for finalizing the
sistent with the paper forms) and to do the calculations, materials (under Task 4). The pilot workshops involved the
specifically for relatively simple rapid renewal projects. following steps or subtasks (see Appendix E):
• Inventories of possible risks and their possible risk man
agement actions for various rapid renewal methods to 1. Plan pilot workshops.
serve as checklists to help ensure comprehensiveness. 2. Conduct first pilot workshop.
• An annotated outline for a suitable risk management plan 3. Evaluate first pilot workshop.
for most rapid renewal projects. 4. Conduct second (and final) pilot workshop.
• A complete hypothetical, relatively simple rapid renewal 5. Evaluate second (and final) pilot workshop.
case study, including development of a complete risk man
agement plan and quantitative risk analysis. The case study Initially, both workshops were structured to be 2 days long,
was evaluated by using all the other materials in this list. with lectures the first day and application of the training materi
als to an actual DOT rapid renewal project on the second day.
Six state DOTs were initially identified as potential candi
Risk Management Program
dates, being both interested and suitable for piloting a risk
Implementation of a risk management process, which can management workshop for rapid renewal. The six states were
provide substantial benefits (e.g., in improved project perfor the following: Colorado Department of Transportation
mance), requires a formal risk management program within a (CDOT), Florida Department of Transportation (FDOT),

20
Minnesota Department of Transportation (MnDOT), New management assignments; the second day targeted relevant
York State Department of Transportation (NYSDOT), North project staff for the example project. The training allowed a
Carolina Department of Transportation (NCDOT) and DOT to conduct simple risk management (develop a risk reg
North Carolina Turnpike Authority (NCTA), and Virginia ister and a risk management plan) on relatively simple rapid
Department of Transportation (VDOT). renewal projects without external resources, or to supervise
A letter was sent to each of these DOTs inquiring into their external resources in conducting more-detailed analyses
interest and qualifications to pilot a risk management work and/or evaluating more complicated rapid renewal projects.
shop for rapid renewal (see Appendix A for the contact infor A specific suitable (relatively simple) rapid renewal project
mation of these DOTs). Five of the six DOTs expressed interest was needed for the 1-day evaluation (on the second day of the
in piloting a risk management workshop for rapid renewal. workshop), to reinforce the training given on the first day.
The team developed a rigorous process for selecting two Such a project was expected to be in the $25 million to $100
DOTs for the pilot workshops; this process was based on mul million range and have a significant rapid renewal element,
tiple characteristics of the project and the agency. To be fair with one workshop evaluating an accelerated construction
in selecting from among the five remaining DOTs, a primary method and the other evaluating an innovative project deliv
set of selection criteria was established. The team looked for ery approach. The schedule did not allow for a risk analysis
the following: (i.e., quantification of uncertainty in project cost and sched
ule) on the example project, which would generally take more
• High chance of success of that DOT’s workshop; than 1 day. However, the schedule did include development
• High contribution to the chance of success for that DOT’s of a preliminary risk register and a risk management plan
future risk management program; and (among other things) that could subsequently be used and
• High contribution of that DOT to the chance of success of developed further in a full risk analysis.
a future national risk management program. The first pilot workshop was held in Raleigh, North Carolina,
for NCDOT/NCTA on October 29–30, 2009. The comments on
The factors that contribute to meeting these primary crite the first workshop eventually led to a major change in the for
ria were identified, and the specific information needed to mat of the training, eliminating evaluation of an actual project.
assess those factors and evaluate the criteria was identified. After these changes had been made, the second pilot workshop
Another letter was then sent to the five remaining DOTs was held in Redmond, Washington, on May 18–19, 2010, for
requesting that information, which would allow the research representatives of various state and other DOTs.
team to evaluate their suitability for piloting a risk manage
ment workshop for rapid renewal.
Subtask 3.1: First Pilot
Each of the DOTs provided a candidate project for the train
Workshop—NCDOT/NCTA
ing. The responses of the DOTs to the request for information
were then rolled up into each of the three categories and sub The goal of the pilot workshop was to assist departments of
jectively graded, considering their suitability in that category transportation in understanding and applying risk manage
(making some assumptions when information was missing). ment techniques throughout the project development process,
Scores were assigned to each grade (e.g., A = 4.0), and the cate especially for rapid renewal projects, thus improving project
gories were weighted to reflect their relative importance; these performance. The approach was a synergy of theoretical prin
scores and weights were then combined to get a total weighted ciples, practical tools for implementation, and guidance for
score for each DOT, with higher total weighted scores being using the results in decisions concerning construction-manage
preferred. The DOTs were then ranked on the basis of their ment risk. The intended outcome of the workshop was a
total weighted scores. The sensitivity of these scores and rank heightened awareness within the highway construction man
ing was then evaluated. Based on this evaluation, NCDOT and agement community that risk can be understood and managed
FDOT came out clearly ahead and were initially selected for the in a structured and cooperative way of doing business. Work
pilot workshops. For a summary of the request for information shop organizers also hoped to spur development of an inde
and the scoring of the DOTs, see Appendix E. pendent capability within the department of transportation to
Subsequent to the selection of the two DOTs, the research accomplish this—either (a) actually doing the most important
team worked with both on logistics and, especially, on refin parts on relatively simple projects or (b) supervising others in
ing their projects. However, the primary purpose of the work doing the other parts (e.g., quantitative risk analysis) or in
shop was to train DOT staff, not to evaluate a project evaluating more complex projects. An MS Excel workbook
(a benefit that was merely a by-product). The first and second template was provided to each participant and guided the user
day targeted potential DOT risk management facilitators and through the various steps of risk management, producing a
subject matter experts who might be involved in future risk risk register and parts of a risk management plan (RMP).

21
The workshop duration was 2 days. Day 1 consisted of lec and not enough interaction). In addition, the notebook
tures and exercises from the guide to provide a fundamental needed better organization (e.g., the appropriate forms
understanding of the risk management process and how to should have been with each module), and the forms were
do each of the important steps, including project “structuring” hard to read and understand. Participants indicated that the
for risk management, risk identification, risk assessment, risk real project application on Day 2 clarified the process and
management planning, and subsequent implementation. material from Day 1 but should have been more integrated
(Note that only an overview of risk analysis was provided.) with that material.
Day 2 involved a practical application of the tools and tech Under a separate contract (using no research project funds),
niques discussed on Day 1 for a preselected DOT project. In the research team conducted another risk identification,
addition to providing education, the workshop resulted in a assessment, and management workshop for NCDOT/NCTA
working risk register and parts of an RMP for that project. It on January 27–28, 2010. The focus was a confidential, large
was anticipated that NCDOT would subsequently implement design–build project, using the methods and materials devel
those parts of the RMP (which includes the risk register) on oped for this research project. Like the second day of the first
the preselected project and might choose to use the risk reg pilot workshop, this workshop did not involve training; it pro
ister in a subsequent quantitative risk analysis (e.g., to deter vided only a short introductory overview of the risk man
mine appropriate budgets and contingencies). agement process. However, it did involve use of the process,
This workshop, including the actual project evaluation, methods, inventories, and template. This workshop was suc
receives further coverage in Appendix E. cessful and essentially validated the methods and materials
About 25 NCDOT/NCTA staff, two SHRP 2 staff, and three (including the template and introductory overview presenta
workshop facilitators attended the first pilot workshop in tion) developed for this research project. The project descrip
Raleigh, North Carolina. A preselected NCDOT rapid renewal tion, base cost and schedule, unmitigated risk register and
project was used on the second day of the workshop to dem performance, risk reduction plan development, and mitigated
onstrate the methods and tools taught on the first day. Appen risk register and performance that were generated in the
dix E provides a description of the rapid renewal project in 1.5‑day workshop proved to be very valuable to the project
Topsail Island, North Carolina. It should be noted that only team; however, they are considered confidential and cannot be
construction cost and schedule, not disruption during con presented here. Nonetheless, feedback from this workshop
struction or longevity, were of interest to the project team. was used to revise the template (and user’s guide and forms)
A hypothetical project scenario used to document the assess and the introductory overview presentation before the second
ments and to automatically conduct the analyses is included in pilot training workshop.
the guide (http://www.trb.org/Main/Blurbs/168369.aspx).
Revisions Based on the Evaluation
Evaluations of First Pilot Workshop of the First Pilot Workshop
The research team requested feedback from both the NCDOT On the basis of the approved changes that resulted from feed
personnel and the SHRP 2 staff on the first pilot workshop. back on the first pilot workshop, the guide and materials were
Although the feedback from the NCDOT participants was extensively revised before the second pilot training workshop
generally positive, comments from both them and SHRP 2 in the following manner:
staff suggested a significant change to the format, which was to
eliminate the application to a real DOT project on the second • The template (an MS Excel workbook) was revised and a
day and replace it with an expanded version of the illustrative user’s guide for the template was developed to improve the
example project from the guide. This change and several other template’s functionality.
revisions were made, and the team began planning for the sec • The hard-copy forms, which are intended to provide all the
ond pilot workshop. The first workshop is further evaluated in inputs needed by the template but are designed to be filled
Appendix E. out quickly by hand, were revised to be consistent with the
Course participants completed evaluations of the first pilot revised template and to improve their functionality.
workshop (17 evaluations total), a summary of which is pre • A presentation (in MS PowerPoint) providing a relatively
sented in Table E.3 in Appendix E. Average scores for each of short overview of the simplified risk management process
the course evaluation questions range between 4 and 5 on a was developed, which would be appropriate for a facilitator
1–5 scale (i.e., As and Bs). In summary, the comments to use as an introduction to a risk management workshop
reflected the assessment that it was a good course. However, (possibly with some modification to customize it for each
participants found Day 1 to be overwhelming (too dense, too specific application). The slides contain significant anima
much theory especially in Module 5, too fast, too much lecture, tion (which can only be seen in presentation mode), as well

22
as significant notes (which can only be viewed completely Evaluations of Second Pilot Workshop
in “notes page” view).
• The hypothetical example for the guide and for the pilot
Feedback was requested from both the DOT participants
and the SHRP 2 staff who attended the second pilot work
training workshop was significantly expanded to include
shop. Only a few participants formally evaluated the course;
(among other things) a complete risk management plan
(including an application of the template and an adden in summary, the commenters said that the course was very
dum for quantitative risk analysis), to better illustrate con good but needed some revisions. The standard flowcharts
cepts and methods. needed revision (to reflect that the environmental process
• The syllabus (including an evaluation form) for the pilot is tied to preliminary design) and the practical exercise
training workshop was revised, as were the annotated needed better implementation. They found the course still
slides (in MS PowerPoint) for the pilot training workshop, dense in places (e.g., regarding structuring exercise) and
consistent with the revised guide and other materials. suggested that trainees would need “hand holding” for real
applications.
Further detail about revisions to the guide and materials is A summary of course participants’ evaluations is presented
provided in Appendix E. in Appendix E (only three evaluations total, because other
attendees left before the end of the course and did not respond
to subsequent requests). Average scores (which have limited
Subtask 3.2: Second Workshop value with such a small number of responses) for each of
As noted earlier, the second (and final) pilot workshop was the course evaluation questions range between 3 and 5 on a
postponed pending resolution of comments on the first 1–5 scale (i.e., As, Bs, and Cs).
workshop and subsequent revision of the guide and materi
als. The objectives of the second workshop were the same as Task 4: Finalize Guide and
the first workshop. The second workshop consisted of 2 days Implementation Materials
of lectures and exercises based on a hypothetical project.
Time was allotted for discussion to provide a fundamental Based on the feedback on the guide and associated implemen
understanding of the risk management process and how to tation materials, the project team resolved the comments from
do each of the important steps, including project “structur pilot workshops and generally improved the materials. The
ing” for risk management, risk identification, risk assessment, team finalized and submitted the guide and the associated
risk management planning, and subsequent implementation. implementation materials to SHRP 2 on February 15, 2011 for
Only an overview of quantitative risk analysis was provided. approval. The final guide and implementation materials are
Because this workshop used a hypothetical project instead described further in Appendix D. The materials are available
of a real project, members of a specific DOT project team at http://www.trb.org/Main/Blurbs/168369.aspx.
were no longer needed in the workshop; only future risk
managers (and, to a lesser extent, subject matter experts) who Task 5: Manage the Study
would apply the guide and materials to their DOT’s projects
needed to attend. Because only a few such people from any The task of overall study management of the R09 research
DOT would attend, representatives from various DOTs were entailed coordinating research team members and the pro
invited to attend the workshop to have a sufficient number of gram officer, as well as regularly communicating the project
participants. Staff from selected state DOTs (Arizona, Cali status. Managing the research team involved coordinating the
fornia, Colorado, Florida, Hawaii, Iowa, Minnesota, Nevada, technical Tasks 1–4 (including technical meetings) and sub
New York, North Carolina, Oregon, Utah, Virginia, and mitting technical reports. The gap analysis and detailed plan
Washington) and Canadian provincial ministries of trans report, as well as the final report, were developed under this
portation (Alberta, British Columbia, and Ontario), as well as task. The team also responded to a request for recommenda
FHWA and SHRP 2 staff, were invited to attend the workshop tions of additional future work.
(see Appendix A for agency contact information). Throughout the duration of the project, regular commu
This pilot training workshop was conducted May 18–19, nication was established through monthly and quarterly
2010, in Redmond, Washington, using the revised guide and progress reports, interim meetings with staff, teleconferences,
materials. The course was ultimately attended by 13 staff from web meetings, and status reports and briefings at Technical
various organizations, including Washington, Minnesota, Coordinating Committee meetings. The research team also
Nevada, and North Carolina DOTs, FHWA, SHRP 2, and a completed miscellaneous SHRP 2–directed activities, such as
consultant for the Federal Transit Administration (FTA) (see presentations at conferences. More detail on study manage
Appendix E for list of organizational attendees). ment is found in Appendix B.

Chapter 3
Conclusions and Suggested Additional Research
Conclusions including metrics) be given at various appropriate venues to

inform DOTs of its existence, value, and availability. Feed
The major products of the research described in this report are back and comments on the guide can be gathered and used
to improve it, especially in relation to checklists of rapid
1. A comprehensive guide, including extensive checklists and renewal methods, risks, and risk reduction actions.
a comprehensive example project application for illustration • The tools (e.g., forms and MS Excel template with user’s
of concepts and training purposes. guide) to implement the guide must be accurate and prac
2. Associated implementation materials for conducting risk tical. Feedback and comments on the tools can be gathered
management on relatively simple rapid renewal projects, and used to improve them (e.g., reporting and fixing of
including annotated training materials, a presentation intro template bugs). The implementation materials also include
ducing the risk management process, forms for document development and maintenance of a database of project
ing the process, and an MS Excel template with user’s guide risks, input assessments, and value metrics.
for documenting the process and automatically conduct • A specific program is generally needed within each DOT to
ing the necessary analyses. conduct risk management. Such a program consists of a
risk management policy and set of procedures, as well as an
The guide and implementation materials were successfully organization structure and infrastructure to carry it out.
tested on two rapid renewal projects and in two pilot training Therefore, DOTs may benefit from technical assistance to
workshops for DOTs and are available at http://www.trb.org/ set up their risk management programs.
Main/Blurbs/168369.aspx. The products will enable DOTs to • Training of DOTs may be beneficial for their staff to digest
facilitate risk workshops for relatively simple rapid renewal the guide and materials so they can apply them, including
projects (as well as other design and construction projects) technical assistance on actual applications. A streamlined
and to develop and subsequently implement comprehensive (e.g., half day) version of the training can be developed and
risk management plans. It is anticipated that, through the presented at venues (e.g., the TRB annual meeting). A web-
implementation of the principles and practices described in based version of the training is recommended (with
this work, DOTs can develop a culture of risk management accommodations for planned discussions and practical
and more successfully complete their rapid renewal projects, exercises). Similarly, feedback and comments on the train
as well as non–rapid renewal projects. ing materials can be gathered and used to improve those
materials.
Suggested Additional Research
Additional work could be cost-effective in getting DOTs to
Although the scope of work has been completed, the follow successfully implement the risk management process described
ing additional work is suggested to maximize the benefits of here so that they can realize its potentially significant benefits.
the completed efforts: Such additional work has been itemized, including cost esti
mates, in Table F.1 of Appendix F.
• Knowledge and availability of the guide and materials are The research undertaken by the R09 project can improve
essential to success. It is recommended that papers and pre project performance in relation to cost, schedule, disruption,
sentations on the guide (both the process and case studies, and longevity if the guide and tools are appropriately applied to
23

24
projects. However, before DOTs are organized and trained to that the guide and tools be updated and improved as needed
conduct risk management, they must be convinced of its ben and as appropriate.
efits. This can best be done by making DOTs aware of the pro In addition to marketing (emphasizing cost-effectiveness
cess (e.g., through wide exposure) and clearly demonstrating its of risk management), such training can be encouraged in vari
value (e.g., through case studies). In addition to marketing (e.g., ous ways. Training is essential to implement the guide. Such
papers and brochures, presentations and webinars, and user training can be delivered at different levels (from providing
conferences), case studies can be collected and evaluated, and familiarity to developing full capability), as dictated by neces
new applications can be encouraged and documented as case sity, and can be available in different formats and media [live
studies. To demonstrate the benefits of implementing the guide, and recorded, on site and remote, National Highway Institute
specific metrics (e.g., total and average project cost savings) can (NHI) and non-NHI format, lecture and application]. Some
be developed and reported. Furthermore, it is recommended of the formats and media would need to be developed first.

References
AASHTO. Primer on Contracting for the Twenty-first Century, 5th ed. Con- http://www.fhwa.dot.gov/ipd/project_delivery/resources/general/
tract Administration Section of the American Association of State mpg_memo.htm. Accessed Dec. 20, 2013.
Highway and Transportation Officials, Subcommittee on Construc- Golder Associates. Implementation Materials for FHWA’s 2006 Guide to
tion, Washington, D.C., 2006. http://construction.transportation.org/ Risk Assessment and Allocation for Highway Construction Manage-
Documents/PrimeronContracting2006.pdf. Accessed Oct. 16, 2013. ment. Available from FHWA. 2008.
AASHTO. Assignment of the Subcommittee on Construction. Washington, Golder Associates, K. Molenaar, M. Loulakis, and T. Ferragut. SHRP 2
D.C. http://construction.transportation.org/Pages/Assignment.aspx. Report S2-R09-RW-2: Guide for the Process of Managing Risk on
Accessed Oct. 10, 2013. Rapid Renewal Projects. Transportation Research Board of the
Anderson, S. D., and J. S. Russell. NCHRP Report 451: Guidelines for War- National Academies, Washington, D.C., 2014. http://www.trb.org/
ranty, Multi-Parameter, and Best Value Contracting. TRB, National Main/Blurbs/168369.aspx.
Research Council, Washington, D.C., 2001. Molenaar, K. R., J. E. Diekmann, and D. B. Ashley. Guide to Risk Assess-
Anderson, S., K. Molenaar, and C. Schexnayder. NCHRP Report 574: ment and Allocation for Highway Construction Management. Report
Guidance for Cost Estimation and Management for Highway Projects FHWA-PL-06-032. Federal Highway Administration, U.S. Depart-
During Planning, Programming, and Preconstruction. Transportation ment of Transportation, 2006.
Research Board of the National Academies, Washington, D.C., 2006. Molenaar, K., S. Anderson, C. Schexnayder. NCHRP Report 658:
Anderson, S., K. Molenaar, and C. Schexnayder. NCHRP Report 625: Guidebook on Risk Analysis Tools and Management Practices to Con-
Procedures Guide for Right-of-Way Cost Estimation and Cost Man- trol Transportation Project Costs. Transportation Research Board of
agement. Transportation Research Board of the National Acade- the National Academies, Washington, D.C., 2010.
mies, Washington, D.C., 2009, pp. B-1. NCDOT. Topsail Island Bridge Replacement. North Carolina Depart-
Caltrans. Project Risk Management Handbook, 2nd ed. Office of State- ment of Transportation, Raleigh, 2009. www.ncdot.gov/projects/
wide Project Management Improvement, California Department topsailislandbridge/. Accessed June 2, 2014.
of Transportation, Sacramento, 2007. http://www.dot.ca.gov/hq/ Project Management Institute. Guide to the Project Management Body of
projmgmt/documents/prmhb/archive/caltrans_project_risk_ Knowledge, 4th ed. Project Management Institute, Newton Square,
management_handbook_20070502.pdf. Accessed June 2, 2014. Pa., 2008.
FHWA. ACTT Interim Report. Federal Highway Administration, U.S. WSDOT. A Policy for Cost Risk Assessment. Washington State Depart-
Department of Transportation, 2004. http://www.fhwa.dot.gov/ ment of Transportation, Olympia, 2005. http://www.wsdot.wa.gov/
construction/accelerated/ir04index.cfm. Accessed Oct. 9, 2013. NR/rdonly res/EF230F3B-1FC1-4A2A-9FC9-B66CF0300
FHWA. Memorandum: Issuance Major Project Guidance. Federal High- E1E/0/DRAFTPolicyforCostRiskAssessment.pdf. Accessed July 17,
way Administration, U.S. Department of Transportation, 2007. 2014.
25

Appendix A
Annotated Bibliography and Agency Contact List
Annotated Bibliography Abi-Karam, T. Managing Risk in Design–Build. AACE International

Transactions, CDR.07, Morgantown, W.Va., 2001, pp. 7.1–7.5.
The following annotated bibliography was initially developed This article provides an overview of the design–build method of proj-
by members of the research team under a different contract ect delivery, in which an owner contracts only with a design-builder,
rather than the traditional method, in which an owner contracts with
for NCHRP Project 8-60, Guidebook on Risk Analysis Tools
an architect, engineer, and contractor. The author proposes that there
and Management Practices to Control Transportation Proj- are inherent risks associated with design–build projects beyond those
ect Costs, and then amended for this research (with much of experienced on traditionally delivered projects and discusses each risk
the content remaining the same). The research team used the in detail.
following resources for the literature review: Ahmad, I. Contingency Allocation: A Computer-Aided Approach.
AACE International Transactions, F.5, Morgantown, W.Va., 1992,
• General Internet search engines pp. 5.1–5.5.
• Transportation Research Board’s TRIS (Transportation This paper introduces a method for allocating contingency to individ-
ual work packages. For each package, ratios of actual cost to estimated
Research Information Systems) Online
cost are calculated for the highest, most likely, and lowest values as
• Academic engineering databases, such as LexisNexis and determined by historical information. Using simulation software, the
Engineering Village 2 practitioner can then determine a most likely cost and allocate an asso-
• Academic business databases, such as EBSCO Business ciated contingency value to each individual package.
Source Complete and Management and Organizational Ali, R. The Application of Risk Management in Infrastructure Con-
Studies struction Projects. Cost Engineering Journal, Vol. 47, No. 8, Aug. 2005,
• ASCE Civil Engineering database pp. 20–27.
• PMI Virtual Library According to this paper, risk management plan (RMP) methodology
provides a logically consistent framework for managing risk. An RMP
• Selected transportation agency websites
methodology is used in this article to formulate a risk management
model, incorporating infrastructure project costs for construction bud-
geting purposes, and applying it to the project to improve the evalua-
Literature Review
tion and control of costs.
A Code of Practice for Risk Management of Tunnel Works. Interna- Amirkhalili, R. Risk and Capital Budgeting. Professional Practice
tional Tunnelling Insurance Group, Jan. 30, 2006.
Guide to Risk, AACE International, Morgantown, W.Va., 1997,
The intent of this code is to promote and secure best practice for min-
pp. 4.0.1–4.0.4.
imizing and managing risks associated with the design and construc-
This paper presents a Monte Carlo simulation model using a spreadsheet
tion of tunnels and associated underground structures, including the
and a personal computer. The paper demonstrates how managers can
renovation of existing underground structures. It describes the process
simulate the effect of changing the variables and examine the resultant
for identifying risks and for determining their allocation between the
range of the project NPV graphically.
parties to a contract and contract insurers, and it discusses the man-
agement and control of risks through the use of risk assessments and Barrazza, G. A., and R. A. Bueno. Cost Contingency Management.
risk registers. This code applies to the stages of tunnel works—project Journal of Management in Engineering, Vol. 23, No. 3, July 2007,
development, design, contract procurement for construction, and con- pp. 140–146.
struction stages—their operation during any stipulated maintenance In this article, the Monte Carlo simulation approach is recommended
period, and the impact of their construction on third parties, including as part of a proposed methodology for cost contingency management,
infrastructure. which also includes a heuristic for contingency assignment (allocation)
26

27
among project activities, as long as the activities have some degree of guide risk management planning and implementation during project
uncertainty regarding their future costs. development.
Bent, J. A. Evaluating and Calculating Contingency. AACE Inter Caltrans. Project Risk Management Handbook: Threats and Oppor
national Transactions, RISK.02, Morgantown, W.Va., 2001, pp. 2.1–2.5. tunities, 2nd ed., rev. 0. Office of Statewide Project Management
A method of calculating contingency using an SFC rating and a contin- Improvement, California Department of Transportation, Sacra-
gency chart is discussed in this paper. The data demonstrated in contin- mento, 2007.
gency charts are obtained from historical data, and the SFC rating (a Directed to Caltrans department project managers, functional managers,
percentage) is developed by calculating the total assessment of 25 factors and other staff engaged in the delivery of capital projects, this handbook
comprising design, estimator performance, time, project conditions, and is intended to provide its audience with a complete, uniform approach to
team experience. managing project risks (both threats and opportunities). It describes the
basic concepts and processes that guide planning and implementing of
Bjornsson, H. C. Risk Analysis of Construction Cost Estimates. Pro
risk management during project development. An important purpose of
fessional Practice Guide to Risk, AACE International, Morgantown,
the revision was to make the department’s present policy more accessible
W.Va., 1977, pp. 182–189.
to the audience than the handbook’s first edition.
This paper briefly discusses the basics of risk simulation, and presents a
computerized model for cost estimating that is designed to cope with Carrier, K. C. A System for Managing Escalation and Contingencies.
the problems of correlation and interpretation. It explains how an esti- Professional Practice Guide to Risk, AACE International, Morgantown,
mate approach using probability is more beneficial than a single value W.Va., 1977, pp. 324–336.
or point estimate approach. This paper presents an approach to organizing, developing, maintaining,
and reporting cost status situations on capital cost projects. The report-
Buchan, D. H. Risk Analysis—Some Practical Suggestions. Cost Engi
ing and simulation techniques described result in predictions of the
neering Journal, Vol. 36, No. 1, Jan. 1994, pp. 29–34.
forecast of final project cost which is continually varying.
This article suggests some practical methods and solutions in the field of
risk management, based on the author’s experience in risk analysis work Cochrane, R. E. Using @Risk to Predict Project Costs. Professional
in the United Kingdom construction industry. He combines a logical Practice Guide to Risk, AACE International, Morgantown, W.Va.,
approach and formal methodology with readily available computer soft- 1992, pp. F.3.1–F.3.5.
ware, including Lotus P-2-3 version 2.4, with add-ins @Risk 1.55, and This paper is an analysis of a search for a better way of estimating the
What’s Best 1.6. cost of a project under current operating conditions. Information was
used from several papers on risk analysis and from annual meetings,
Burger, R. Contingency: Quantifying the Uncertainty. Cost Engineer
including papers about developing a modified approach to estimating
ing Journal, Vol. 45, No. 8, Aug. 2003, pp. 12–17.
using the @Risk personal computer program.
In this paper, the author defines two methods for determining contin-
gency. Zastrozny’s method is used to calculate contingency; Simple Cohen, M. W., and G. R. Palmer. Project Risk Identification and Man-
Multi-Attribute Rating Technique (SMART) is used to obtain an uncer- agement. AACE International Transactions, INT.01, Morgantown,
tainty rating that, when used together with the calculated contingency, W.Va., 2004, pp. 1.1–1.5.
provides an estimate for the contingency needed on a particular project. This paper recommends the use of the Critical Path Method (CPM)
schedule as a mechanism to manage construction risk on a project. The
Burroughs, S. E., and G. Juntima. Exploring Techniques for Contin-
project life cycle is defined and the author emphasizes the necessity to
gency Setting. AACE International Transactions, EST.03, Morgan-
manage risks throughout the entire project life cycle using the CPM net-
town, W.Va., 2004, pp. 3.1–3.6.
work to perform “what if ” analyses to adjust a baseline schedule accord-
This paper discusses the following commonly used techniques for deter-
ing to a set of risks brainstormed by the project team.
mining contingency: predetermined percentage, expert’s judgment, risk
analysis, and regression analysis. Based on the performance of each of Committee for Oversight and Assessment of U.S. Department of
these techniques, the author asserts that certain techniques are more accu- Energy Project Management, Board on Infrastructure and the Con-
rately and appropriately used depending on the project risks involved. structed Environment, Division on Engineering and Physical Sci-
ences, National Research Council of the National Academies. The
Caddell, C. P., S. R. Crepinsek, and G. P. Klanac. Risk Assessments:
Owner’s Role in Project Risk Management, National Academies Press,
Value of the Process. AACE International Transactions, RISK.01,
2014. www.nap.edu/catalog/11183.html.
Morgantown, W.Va., 2004, pp. 1.1–1.6.
This report was prepared as a summary of the most effective risk man-
Conducting cost and schedule risk assessments on projects has proven to
agement practices used by owner organizations in project management
be a valuable exercise. This paper suggests that using the right process can
in the public and private sectors. The primary objective is to provide
significantly increase the quality of the risk analysis and its results, and
U.S. Department of Energy project directors with an understanding of
provide a number of other benefits to the project. If these assessments
(a) the risk management role of an owner’s representative member of a
are conducted properly, management and the project team can capture
project management team, and (b) the knowledge needed for effective
the inherent value in the effort and improve their chances for success
oversight of risk management activities that are delegated to contrac-
because key project risks are evaluated and mitigation steps are known.
tors. The document identifies major steps in a specific risk management
Caltrans. Project Risk Management Handbook. Office of Project process based on a proactive approach that requires owners to take a set
Management Process Improvement, California Department of Trans- of basic actions to manage risk. It emphasizes that successful risk man-
portation, Sacramento, June 2003. agement must be performed by qualified personnel working within a
This is California Department of Transportation’s guide to risk and project management process that includes review and approval by
risk management. It describes the basic concepts and processes that senior management.

28
Coppo, R. J. Risk Modeling with Influence Factors. AACE Interna This article demonstrates a quantitative approach to construction risk
tional Transactions, RISK.08, Morgantown, W.Va., 2003, pp. 8.1–8.2. management through an analytic hierarchy process (AHP) and decision
The influence factor risk model is based on an interview process that tree analysis. The entire project is classified to form a few work pack-
asks a series of questions about the source of uncertainty in the esti- ages. With the involvement of project stakeholders, risky work packages
mate. This presentation shows how to model risk by assigning probabil- are identified. As all the risk factors are identified, their effects are quan-
ity functions and associated costs to the influence factors. The model tified by determining probability (using AHP) and severity (guess esti-
output results in the total cost of uncertainty. Using this approach to mate). Various alternative responses are generated, listing the cost
risk modeling puts the focus on the work process and how it introduces implications of mitigating the quantified risks.
uncertainty in the estimate.
Douglas, E. E. Contingency Management on DOE Projects. AACE
Cost Engineering Terminology: AACE International Recommended International Transactions, RISK.03, Morgantown, W.Va., 2001,
Practice No. 10S-90. AACE International, Morgantown, W.Va., 2007. pp. 3.1–3.6.
This publication contains terms that have been developed by various This paper defines contingency, outlines the elements of risk manage-
AACE International technical committees, special interest groups, or ment, provides guidelines for the application of contingency to the
project teams. All terms have been subject to a thorough review process, project baseline, and proposes a standard process to establish, track,
followed by approval by the AACE International Technical Board. Por- and control contingency on a DOE project. While the paper is spe-
tions of this document have been incorporated into the American cific to DOE projects, the definitions and basic guidelines can easily
National Standards Institute’s (ANSI) Standard No. Z94.x. be used by other industries to supplement their methods of contin-
gency management.
Curran, K. M. Value-Based Risk Management (VBRM). Cost Engi
neering Journal, Vol. 48, No. 2, Feb. 2006, pp. 15–22. Eschenbach, T. G. Risk Management Through Sensitivity Analysis.
As practiced in today’s varied applications, traditional risk manage- Professional Practice Guide to Risk, AACE International, Morgan-
ment is typically defined as a process to identify, analyze, mitigate, town, W.Va., 1996, pp. 4.1–4.6.
and control risks and opportunities in decision making. Although This paper compares several approaches to identifying and describ-
such actions move the ball, they do little to carry the decision maker ing key risks and to defining cost/time/risk trade-offs. The paper goes
over the goal line. Two additional requirements of risk management in depth, describing the advantages and disadvantage of using sensi-
are presented in this paper: benchmarking and grading. Incorpora- tivity analysis.
tion of these two attributes into traditional risk management practice
FHWA. Major Project Program Cost Estimating Guidance. U.S.
produces a much-improved decision technology, value-based risk
Department of Transportation, Jan. 2007, pp. 1–12.
management.
This guidance document explains key principals used when preparing a
Curran, M. W. Range Estimating—Coping with Uncertainty. Profes program cost estimate at any stage of a major project. It also explains the
sional Practice Guide to Risk, AACE International, Morgantown, cost elements that should be included when preparing a program cost
W.Va., 1976, pp. 366–372. estimate for a major project and how program cost estimates should be
This paper explains why conventional methods of estimating come up used throughout the project.
short and why uncertainty needs to be considered and methods need
Gunham, S., and D. Arditi. Budgeting Owner’s Construction Con-
to be changed. This paper proposes the idea of range estimating, with
tingency. Journal of Construction Engineering and Management,
in-depth information about how it is used and can be beneficial to
Vol. 133, No. 7, June 2007, pp. 492–497.
coping with uncertainty.
In this paper, the authors suggest that the common practice of allocat-
Curran, M. W. Range Estimating: Reasoning with Risk. Professional ing a fixed owner contingency (e.g., 10% of the contract value) to all
Practice Guide to Risk, AACE International, Morgantown, W.Va., projects contracted out by an owner is not appropriate. Instead, they
1988, pp. N.3.1–N.3.9. propose a methodology in which the owner (1) analyzes historical proj-
This paper explains why our current methods of estimating come up ect data; (2) identifies the line items that are problematic; (3) takes the
short because of the methods we use, not the people who are perform- necessary measures at the preconstruction stage to streamline these line
ing these methods. It goes on to explain how we think about estimates items with respect to site conditions, time constraints, constructability
and how we should think about estimates. issues, and project scope; and (4) budgets contingency funds based on
this information.
del Cano, A. D., and M. P. de la Cruz. Integrated Methodology for
Project Risk Management. Journal of Construction Engineering and Hackney, J. W. Applied Contingency Analysis. Professional Practice
Management, Vol. 128, No. 6, 2002, pp. 473–485. Guide to Risk, AACE International, Morgantown, W.Va., 1985,
First, the article explains a complete or generic project risk manage- pp. B.2.1–B.2.4.
ment process to be undertaken by organizations with the highest level This paper describes what contingency is and why it is so important to
of risk management maturity in the largest and most complex con- a project’s performance. It then talks about the different ways in which
struction projects. Next, factors influencing possible simplifications contingency will help a project and how it can be used or analyzed at
of the generic process are identified, and simplifications are proposed different points in the project.
for some cases. Then the application to a real project is summarized.
Hastak, M., and E. J. Baim. Risk Factors Affecting Management and
As a final validation, a Delphi analysis has been developed to assess the
Maintenance Cost of Urban Infrastructure. Journal of Infrastructure
project risk management methodology explained here, and the results
Systems, Vol. 7, No. 2, 2001, pp. 67–76.
are presented.
This paper identifies risk factors that influence the cost-effective man-
Dey, P. K. Project Risk Management: A Combined Analytic Hierarchy agement, operation, and maintenance of bridges, roads and highways,
Process and Decision Tree Approach. Cost Engineering Journal, and subway stations, as well as how and when in the project life cycle the
Vol. 44, No. 3, March 2002, pp. 13–26. identified risk factors affect the associated facility costs.

29
Hecht, H., and D. Niemeier. Too Cautious? Avoiding Risk in Transpor- Karlson, J. T., and J. Lereim. Management of Project Contingency
tation Project Development. Journal of Infrastructure Systems, Vol. 8, and Allowance. Cost Engineering Journal, Vol. 47, No. 9, Sept. 2005,
No. 1, 2002, pp. 20–28. pp. 24–29.
This research paper explores the relationship between risk-averse Cost overruns in engineering projects occur frequently because a cer-
behavior (i.e., engineering judgment applied to certain types of situa- tain margin of risk is inherent in all projects. As a result, risk man
tional problems) and transportation project development time/cost. It agement is continuously gaining the attention of the engineering
concludes that risk-averse behavior by project managers does not sig- industries. Reserves or contingencies represent the additional funding
nificantly affect project development time or cost and that the required required to account for the cost of risk. However, many corporations
project development process is simply too rigid and bureaucratic to have different practices for estimating and managing such reserves.
allow an individual project manager to significantly reduce the time or This article presents several techniques and methods for estimating
cost of project development. such reserves.
Highways Agency Framework for Business Risk Management. High- Kraemer, G. T. Quick and Effective Risk Analysis. Professional Prac
ways Agency, UK Department of Transport, London, 2001, pp. 1–9. tice Guide to Risk, AACE International, Morgantown, W.Va., 1977,
This document sets out the UK Highways Agency’s framework for pp. 177–181.
risk management. It outlines both the agency’s approach to risk man- This paper describes a different kind of approach to risk analysis.
agement and the associated roles and responsibilities of the agency’s
colleagues. Kumaraswamy, M. M. Appropriate Appraisal and Apportionment of
Megaproject Risks. Journal of Professional Issues in Engineering Edu
Humphreys, K. K. Risk Analysis and Contingency Determination cation and Practice, Vol. 123, No. 2, 1997, pp. 51–56.
Using Range Estimating, AACE International Recommended Practice This paper develops and describes strategies for appraising the synergistic
No. 41R-08, TCM Framework: 7.6–Risk Management. AACE Interna- potential and risk carrying capacities of prospective project participants,
tional, Morgantown, W.Va., 2008. and for identifying, analyzing, and responding to risks by an appropriate
This document offers guidelines for analyzing risk by using range esti- appointment to those best equipped and motivated to control them.
mating, which most practitioners would consider a reliable practice and
would recommend be considered for use when applicable. This text aims Lewis, L. Range Estimating: Managing Uncertainty. AACE Bulletin,
to improve communication of the meaning of the practice called range Nov.–Dec. 1977, pp. 205–207.
estimating because its authors have found that methods being called This paper describes range estimating. It also describes how and why it
range estimating in industry do not meet the definition in this document. should be used. Range estimating quantifies the uncertainty of an esti-
The authors urge practitioners to confirm that any use of the term meets mate by addressing itself to the uncertainties of the critical elements of
the definition found here. the estimate.
Jarvis, J. A. Capital Estimates and Cost Control for a Long Term Lorance, R. B., and R. V. Wendling. Techniques for Developing Cost
Construction Program. AACE Transactions, AACE International, Risk Analysis Models. AACE International Transactions, RISK.02,
Morgantown, W.Va., 1976, pp. 63–69. Morgantown, W.Va., 1999, pp. 2.1–2.6.
The purpose of this paper is to examine, in context, the cost engineering This paper defines Monte Carlo simulation and discusses how the tech-
problems associated with long-term strategies. These include projects nique can be used to develop risk analysis models to manage risk and
that have taken more than 10 years. predict cost overruns.
Jordan, D. W. Managing Change: Making the Most of Contingency. Lukas, J. A. Managing Risk on Capital Projects. AACE Transactions,
Professional Practice Guide to Risk, AACE International, Morgan- AACE International, Morgantown, W.Va., 1995, pp. 7.1–7.4.
town, W.Va., 1989, pp. Q.1.1–Q.1.9. This paper discusses risk management, covers the process phases that
This paper describes a trend program that provides a means of identify- incorporate risk management, and then focuses on experiences with
ing and evaluating the impact which changes have on the cost and sched- capital projects at Kodak in using risk management. Specific topics
ule of a capital project. The program relies on the involvement and include the risk analysis process and how it is used to determine project
cooperation of all members of the project team. The resulting effort pro- contingency and the potential range of cost outcomes. Case histories
vides management with an up-to-date report of the status of the project, comparing risk projections with actual project costs are reviewed, along
a projection of the direction it is taking, and a means of documenting with key lessons from more than 3 years of using risk management.
what changes have occurred to cause variations from the original plan.
Mathur, K. S. Risk Analysis in Capital Cost Estimating. Cost Engineer
Kageyama, K. Probabilistic Cost Estimate Tree Analysis—Computer ing Journal, Vol. 31, No. 8, Aug. 1989, pp. 9–16.
Program. Professional Practice Guide to Risk, AACE International, This article presents an approach to the analysis of historical cost data
Morgantown, W.Va., 1979, pp. C.3.1–C.3.6. and the prediction of costs, which takes into account risk and contin-
This paper describes (a) the probabilistic cost estimate tree (PCET) gency involved in budgeting and cost control. The method is a com-
and risk data preparation required to use the tree; (b) the PCET computer model based on statistical and operational research techniques.
puter program flow diagram with algorithm; and (c) a sample of a
Marshall, H. E., R. E. Chapman, and C. J. Leng. Risk Mitigation Plan
typical operation.
for Optimizing Protection of Constructed Facilities. Cost Engineer
Kaliprasad, M. Proactive Risk Management. Cost Engineering Jour ing Journal, Vol. 46, No. 8, Aug. 2004, pp. 26–33.
nal, Vol. 48, No. 12, Dec. 2006, pp. 26–36. This article describes a three-step protocol for developing a risk-
This article provides an overview of risk management, its concepts, mitigation plan for optimizing protection of constructed facilities. Step 1
components, and the associated terminology and methodology, assesses the risk of uncertain, costly, man-made and natural hazards,
together with different views on how risk management integrates into including terrorism, floods, earthquakes, and fire. Step 2 identifies alter-
project management. native risk-mitigation strategies, used singly or in combination, to reduce

30
the expected value of damages from such events. Step 3 evaluates the report Management of Project Risk, prepared by the Construction
life-cycle economic effectiveness of alternative mitigation strategies. Industry Institute.
Mlakar, P. F., and L. M. Bryant. Direct Range Cost Estimating. Profes Noor, I., and R. L. Tichacek. Contingency Misuse and Other Risk
sional Practice Guide to Risk, AACE International, Morgantown, Management Pitfalls. AACE International Transactions, RISK.04,
W.Va., 1990, pp. K.4.1–K.4.4. Morgantown, W.Va., 2004, pp. 4.1–4.7.
This paper describes the direct range of cost estimating and how to fix In this article, the authors assert that the methodology that is to be used
the shortcomings of range estimating. It also goes into detail about how for the derivation of contingency funds should be based on the level of
range estimating works and why it is popular despite its shortcomings. risks on a project. Contingency funds should be used to address specific
risks as they occur along the project execution schedule. Any unspent
Molenaar, K. R. Programmatic Cost Risk Analysis for Highway Mega-
funds should be returned for possible use on other projects or to fund
Projects. Journal of Construction Engineering and Management,
Vol. 131, No. 3, 2005, pp. 343–353. other activities. Based on the results of the project risk assessments,
This paper presents a methodology developed by the Washington State contingency drawdown plots could be used to manage the contingency
Department of Transportation for its cost estimating validation process. funds and to improve the project budgetary process.
Nine case studies, with a mean cumulative value of over $22 billion, are Paek, J. H. Contractor Risks in Conceptual Estimating. Cost Estimat
presented and analyzed. Programmatic risks are summarized as eco- ing Journal, Vol. 36, No. 12, Dec. 1994, pp. 19–22.
nomic, environmental, third-party, right-of-way, program management, This article describes the difficulties of bidding a job on the basis of
geotechnical, design process, construction, and other minor risks. conceptual drawings. It explains the major problems with the estimate
Molenaar, K. R., J. E. Diekmann, and D. B. Ashley. Guide to Risk Assess and goes in depth on how to bid successfully and be competitive.
ment and Allocation for Highway Construction Management. Report Parsons, A. Touran, and Golder Associates. Risk Analysis Methodolo
No. FHWA-PL-06-032. FHWA, U.S. Department of Transportation, gies and Procedures. Federal Transit Administration, U.S. Depart-
2006. ment of Transportation, 2004. http://www1.coe.neu.edu/~atouran/
This instructional report was developed by FHWA to help raise aware- FTA%20White%20Paper%20on%20Risk%20Analysis-Final%20
ness of risk management techniques and to begin the process of incor- June%202004.pdf. Accessed Aug. 21, 2013.
porating elements of risk management into the institutional structures This report describes procedures for performing risk analysis, which
of DOTs. The goal of the report is to raise awareness within the highway consists of two parts: (a) risk assessment, which includes identification
construction management community that risk can be understood and and evaluation of risks in terms of their likelihood of occurrence and
managed. The more strategic goal is that DOTs and contractors, as their probable consequences; and (b) risk management, which involves
appropriate, will actually identify, assess, analyze, mitigate, allocate, and taking cost-effective actions to reduce risks and to realize opportunities.
monitor risk in a structured and cooperative way.
Piekarski, J. A. Simplified Risk Analysis in Project Economics. Profes
Moselhi, O. Risk Assessment and Contingency Estimating. AACE sional Practice Guide to Risk, AACE International, Morgantown,
International Transactions, D&RM/A.06, Morgantown, W.Va., 1997, W.Va., 1984, pp. D.5.1–D.5.3.
pp. 6.1–6.6. The purpose of this paper is to demonstrate the use of a simplified
This paper describes the common sources of risk associated with the method of incorporating risk analysis in project economics to bridge
delivery of engineering, procurement, and construction projects. It pro- the technology gap and bring the decision maker in direct contact with
vides a basic anatomy for project risk. This paper focuses primarily on the critical uncertainties of the project. This paper is meant to present
contingency as a vehicle for managing this risk. The paper presents a another tool that can be used, not replace the computer model.
direct quantitative method for contingency estimation and avoiding
time-consuming analyses. Ramgopal, M. Project Uncertainty Management. Cost Engineering
Journal, Vol. 45, No. 12, Dec. 2003, pp. 12–24.
Nabors, J. K., and P. A. Owen. Quantifying Risks in Capital Estimates. This article argues that all current project risk management processes
Professional Practice Guide to Risk, AACE International, Morgan- induce a restricted focus on the management of project uncertainty
town, W.Va., 1983, pp. B.5.1–B.5.7. because the term risk encourages a threat perspective. The article dis-
This article explains why traditional cost-estimating techniques cannot cusses the reasons for this view and argues that a focus on uncertainty
be used across all projects. It goes in depth on how to identify risk and rather than risk could enhance project risk management, in terms of
uses an example of risk analysis and construction on a chemical plant.
designing desirable futures and planning how to achieve them.
Nassar, K. Cost Contingency Analysis for Construction Projects
Regan, S. T. Risk Management Implementation and Analysis. AACE
Using Spreadsheets. Cost Engineering Journal, Vol. 44, No. 9, Sept.
International Transactions, RISK.10, Morgantown, W.Va., 2003,
2002, pp. 26–31.
pp. 10.1–10.5.
The purpose of this article is to present a quantitative approach for per-
The author of this paper defines the term risk and provides a guideline
forming contingency analysis for a construction project using basic
for developing a risk management program capable of being imple-
spreadsheet techniques. The approach is applied to a practical case study,
mented and analyzed on any type of project.
and a sensitivity analysis of the results is carried out. Practicing contrac-
tors can use the developed spreadsheet to analyze cost overrun risks. Ripley, P. W. Contingency! Who Owns and Manages It? AACE Interna
tional Transactions, CSC.08, Morgantown, W.Va., 2004, pp. 8.1–8.4.
Neil, J. M. Management of Project Risks. Professional Practice Guide
This paper was used as a basis for discussion at the 2004 annual meeting
to Risk, AACE International, Morgantown, W.Va., 1989.
of AACE International. The author defines contingency and discusses
This paper is an introduction to management of risks associated
the various ways in which different project players use reserve funds.
with a construction project, specifically those faced by the contrac-
tor. The principles involved generally apply to management of risk Risk Management Committee, Association for the Advancement
associated with any endeavor. This paper is a condensation of the of Cost Engineering International. AACE International’s Risk

31
Management Dictionary. Cost Engineering Journal, Vol. 42, No. 4, This paper introduces a definition of risk based on cost engineering
April 2000, pp. 28–31. standards and not the mathematical approach. The purpose of the
This article provides 50 definitions of terms related to the subject of risk paper is to present a simple mathematical aid, based on “risk assess-
management. It was originally published in an October 1995 issue of ments,” for (a) determining undefined costs, (b) evaluating range of
Cost Engineering and was the first article in AACE International’s Pro- accuracy, and (c) presenting the results of analysis to management.
fessional Practice Guide to Risk. Many of the terms included deal with Smith, G. L. Monte Carlo Simulation: A Tool for Combating Uncer-
probability and statistics or are particular to project risk management. tainty in Economic Analysis. Professional Practice Guide to Risk,
Roberds, W., and T. McGrath. Quantitative Cost and Schedule Risk AACE International, Morgantown, W.Va., 1966, pp. 1–17.
Assessment and Risk Management for Large Infrastructure Projects. This paper describes how a Monte Carlo simulation can and should be
Proc., 3rd Annual Conference of the PMI College of Scheduling, Orlando, used. It describes how the simulation will handle the uncertainty and
Fla., April 2006. produce the best estimate from the given data.
This paper presents an innovative, practical, and cost-effective approach Smith, K. A., and R. L. Thoem. Project Cost Evaluation Using Proba-
to problem solving by (a) quantifying actual project cost and schedule bility Concepts. Professional Practice Guide to Risk, AACE Interna-
uncertainty within a probabilistic, risk-based, integrated cost and tional, Morgantown, W.Va., 1974, pp. 275–279.
schedule model, in which the uncertainties in inputs are explicitly This paper outlines a stronger technique for preparing realistic cost esti-
assessed (including de-biasing, through elicitation of technical experts) mates for major capital investments by using probability techniques.
and incorporated; (b) identifying and prioritizing critical cost and These probability concepts for project evaluation are then compared
schedule risks and opportunities, as well as quantifying the benefits of with traditional approaches.
proposed mitigation strategies to address those critical risks and oppor-
tunities; and (c) improving owner and project team understanding and Smith, R. J. Owner’s Guide to Saving Money by Risk Allocation: Report
communication. While it is not yet possible to fully validate this new to the American Consulting Engineers Council and Associated Gen
approach, this paper presents an initial evaluation, and discusses chal- eral Contractors of America. American Consulting Engineers Coun-
lenges related to better implementation. cil, Washington, D.C., 1992, pp. 1–17.
This report examines the ability to divide up the risk of a project so as
Robert, J. Allocating Construction Risks: What, Why, How & Who? not to affect any one party more than another. This can be done if the
Guidelines for Improving Practice: Architects and Engineers Profes risk is properly handled and assigned to the appropriate member of the
sional Liability, Vol. 17, No. 5, 1987, pp. 1–5. construction team.
This paper describes how design professionals and owners could ben-
Sonmez, R., A. Ergin, and M. T. Birgonul. Quantitative Methodology
efit from taking a more global view of risk. The author describes how
for Determination of Cost Contingency in International Projects.
this could benefit everyone involved and improve the current state of
Journal of Management in Engineering, Vol. 23, No. 1, pp. 35–39.
risk assessment.
This paper presents a quantitative methodology to determine financial
Rothwell, G. Cost Contingency as the Standard Deviation of the Cost impacts of risk factors during the bidding stages of international con-
Estimate. Cost Engineering Journal, Vol. 47, No. 7, July 2005, pp. 22–25. struction projects. Project and country data for 26 construction proj-
This article compares project stages, accuracy ranges, and cost contin- ects from 21 countries were collected for evaluation of the international
gencies recommended by the Association for the Advancement of risk factors. The factors affecting cost contingency were identified using
Cost Engineering International and the Electric Power Research Insti- correlation and regression analysis technique.
tute. It shows that current guidelines are consistent with contingen- Stevenson, J. J., Jr. Determining Meaningful Estimate Contingency.
cies equal to the standard deviation of the cost estimate. It suggests Cost Engineering Journal, Vol. 26, No. 1, Feb. 1984, pp. 35–41.
how this standard deviation can be derived from a confidence level This article describes the problems that a power plant company went
(e.g., 80%) for a given accuracy (e.g., ±10%) for normal and lognor- through to establish a program for setting contingency on the retrofit-
mal probability distributions. ting operations of many of their power plants. It describes their goals
Rowe, J. F. A Construction Cost Contingency Tracking System (CTS). for the project and how they went about attaining them.
Cost Engineering Journal, Vol. 48, No. 2, Feb. 2006, pp. 31–37. Stukhart, G. Sharing the Risks of the Cost of Inflation. Professional
The author of this article presents a forward-looking cost contingency Practice Guide to Risk, AACE International, Morgantown, W.Va.,
tracking system that uses readily available cost information and a sim- 1982, pp. M.1.1–M.1.7.
ple spreadsheet format. Using the contingency tracking system, project This paper discusses the risk of inflation over the period of a construc-
managers can assign contingency to construction contracts, track its tion project. It discusses how and to whom the effect of inflation should
consumption, and manage a reserve for upcoming work. This article be dispersed. It also talks about how the contract can help divide some
discusses the development of rules, using the perceived risk of each con- of these costs for the contractor.
struction contract, to assign an initial contingency value to each con-
struction contract. Touran, A. Probabilistic Model for Cost Contingency. Journal of
Management in Engineering, Vol. 129, No. 3, June 2003, pp. 280–284.
Shafer, S. L. Estimate and Project Risk Analysis Approaches. Profes This paper proposes a probabilistic model for the calculation of project
sional Practice Guide to Risk, AACE International, Morgantown, cost contingency by considering the expected number of changes and
W.Va., 1991, pp. K.5.1–K.5.5. the average cost of change. The model assumes a Poisson arrival pattern
This paper discusses the different methods that can be used to identify for change orders and independent random variables. The probability
risk and with that set contingency. It tells which method to use based on of cost overrun for a given contingency level is calculated.
the individual characteristic of the project at hand.
U.S. Department of Energy. Program and Project Management for the
Shafer, S. L. Risk Analysis for Capital Projects Using Risk Elements. Acquisition of Capital Assets. Order DOE O 413.3B, Nov. 29, 2010.
Professional Practice Guide to Risk, AACE International, Morgan- This document provides program and project management direction
town, W.Va., 1974, pp. 218–223. for the acquisition of capital assets that are delivered on schedule,

32
within budget, and fully capable of meeting mission performance and • Seven Bridges in 75 Days, E. Powell, North Carolina
environmental, safety, and health standards. Department of Transportation.
U.S. Department of Energy. Project Management Practices, Risk • Risk Assessment for Bonds for Highway Contracts, M.
Management. U.S. Department of Energy Office of Management, McCallum, National Association of Surety Bond Producers.
Budget, and Evaluation, and Office of Engineering and Construction • An Update on the Accelerated Construction Technology
Management, June 2003.
Transfer Program, Experiences and Lessons Learned, C.
This document is designed to provide acquisition professionals and
program and project management offices with a reference for dealing
Schneider, FHWA.
with system acquisition risks. It is intended to be useful as an aid in • Accelerated Bridge Construction (ABC) and the Utah
classroom instruction and as a reference for practical applications. Experience, K. Peterson, Utah Department of Transporta-
U.S. Department of Transportation. Risk Assessment Methodologies
tion, and M. L. Ralls, Ralls Newman, LLC.
and Procedures. Prepared by Parsons, San Francisco, Calif., June 2004. • Quality Assurance in Design–Build Projects, D. Gransberg,
The report explains in detail the rationale for risk analysis of public University of Oklahoma.
transit capital projects. The emphasis is on probabilistic methods for • Alternative Contracting Approaches to Accelerate Project
evaluating risks—as this approach provides an effective way to model Completion, I. Damnjanovic, Texas Transportation
uncertain events—and describes the procedures a project owner should Institute.
follow to carry out the process.
Washington State Department of Transportation, Olympia, Wash. The AASHTO SOC has posted these papers on its website:
http://www.wsdot.wa.gov/. http://construction.transportation.org/Pages/default.aspx
This site was used to conduct research and contains many valuable links
and much useful information.
(accessed Aug. 22, 2013).
Wright, P. A., and T. V. Hill. Cost Estimating: Dealing with Uncer-

tainty. Professional Practice Guide to Risk, AACE International, Additional Sources
Morgantown, W.Va., 1986, pp. E.5.1–E.5.8.
Contract Administration Section, AASHTO Subcommittee on Con-
This paper discusses the problem of cost estimating and how to deal
struction. Primer on Contracting: for the Twenty-first Century, 5th ed.
with other types of markets. It goes into detail about how to use a prob-
AASHTO, Washington, D.C., 2006. http://construction.transportation.
abilistic method for construction cost estimates when dealing with
org/Documents/PrimeronContracting2006.pdf. Accessed Oct. 16,
other economic market uncertainties. It also describes how to forecast
2013.
future competitive activity in other economic markets. Pakkala, P. Innovative Project Delivery Methods for Infrastructure:
Yeung, D. K. L., S. Cheung, K. K. W. Cheung, and H. C. H. Seun. Web- An International Perspective. Finnish Road Enterprise, Helsinki, Fin-
Based Project Cost Monitoring System for Construction Manage- land, 2002.
ment. AACE International Transactions, IT.09, Morgantown, W.Va., Texas Department of Information Resources. http://www.dir.state
2003, pp. 9.1–9.11. .tx.us/eod/qa/risk/.
This paper discusses the concepts of developing an automated online
cost control/monitoring and assessment system for construction proj-
ects. One of the key functions of a project cost monitoring system is as Agency Contact List
a detector of potential risks and hazards in cost management, or as a
The following is a list of contact information for agencies
warning sign to the client and professionals that the preset cost budget
is overrun and requires immediate corrective action. whose representatives participated in interviews or who were
invited to attend a pilot workshop.
Zeanah, P. H. Advanced Techniques for Contingency Evaluation.
Professional Practice Guide to Risk, AACE International, Morgan-
town, W.Va., 1973, pp. 68–75. Transportation Research Board
This paper reviews the fundamentals of probability and then uses 500 Fifth Street, NW
these techniques—along with Monte Carlo simulation and decision Washington, DC 20001
trees analysis—to better understand an estimate when uncertainty is
involved. It explains how to use these techniques when using objec- Federal Highway Administration
tive data.
Headquarters, Southeast Federal Center Building
1200 New Jersey Avenue, SE
Washington, DC 20590-9898
SOC Annual Meeting 2008
The AASHTO Subcommittee on Construction (SOC) 2008 Federal Highway Administration
annual meeting was held August 3–7, 2008, in San Antonio, Resource Center
Texas. The following papers relevant to risk management of 61 Forsyth Street SW, Suite 17126
rapid renewal projects were presented: Atlanta, GA 30303

33
Federal Highway Administration North Carolina Department of Transportation and North

Washington Division Carolina Turnpike Authority
711 South Capitol Way, Suite 501 5400 Glenwood Avenue, Suite 400
Olympia, WA 98501 Raleigh, NC 27612
Oregon Department of Transportation, Region 1

Arizona Department of Transportation
123 NW Flanders Street
Room 131A, MD 102A
Portland, OR 97209-4012
206 South 17th Avenue
Phoenix, AZ 85007
Seattle Department of Transportation
Capital Projects and Roadway Structures Division
California Department of Transportation Headquarters 700 Fifth Avenue, Suite 3900
1120 N Street Seattle, WA 98104
P.O. Box 942873
Sacramento, CA 94273-0001 Utah Department of Transportation
Mail Stop 141200
Colorado Department of Transportation 4501 South 2700 West
Project Development Branch Salt Lake City, UT 84114-1200
4201 East Arkansas Avenue, 4th Floor
Virginia Department of Transportation
Denver, CO 80222
1401 East Broad Street
Richmond, VA 23219
Florida Department of Transportation
605 Suwannee Street Washington State Department of Transportation
Tallahassee, FL 32399 Cost Risk Estimating Management
310 Maple Avenue SE
Hawaii Department of Transportation P.O. Box 47336
Aliiaimoku Building Olympia, WA 98504-7336
869 Punchbowl Street
Honolulu, HI 96813 Ministry of Transportation Alberta
Twin Atria Building, 2nd Floor
4999 - 98 Avenue
Iowa Department of Transportation Edmonton, AB T6B 2X3
800 Lincoln Way Canada
Ames, IA 50010
Ministry of Transportation British Columbia
Minnesota Department of Transportation 940 Blanshard Street
1000 Highway 10 West Victoria, BC V8W 9T5
Detroit Lakes, MN 56501 Canada
Ministry of Transportation Ontario

Nevada Department of Transportation
301 St. Paul Street
1263 South Stewart Street
St. Catharines, ON L2R 7R4
Carson City, NV 89712 Canada
New York State Department of Transportation Other contacts include Texas DOT, Idaho DOT, Wisconsin
50 Wolf Road DOT, Alaska DOT, King County (WA) DOT, and the Federal
Albany, NY 12232 Transit Administration (FTA).

Appendix B
Study Management
Task 5, the task of overall study management of the R09 proj- 44 Interim meetings with SHRP 2 staff (one in Washington,
ect, entailed the following: D.C. and one in Seattle, Washington);
44 Teleconferences and web meetings as needed; and
• Managing the research and the research team. This involved 44 Status reports, including a briefing at a meeting of the
coordinating the technical Tasks 1–4 (including technical Renewal Technical Coordinating Committee.
meetings) and submitting technical reports. • Responding to a SHRP 2 request for recommending addi-
• Completing miscellaneous SHRP 2–directed activities tional future work.
(e.g., developing and presenting a poster for the 2009 TRB • Developing and submitting to SHRP 2 the draft Task 1 Gap
annual meeting). Analysis and Detailed Plan Report on October 31, 2008.
• Communicating regularly with SHRP 2 regarding project • Developing and submitting to SHRP 2 on July 16, 2010, the
status throughout the duration of the project, including draft of this research report, and on February 15, 2011, this
44 Monthly and quarterly progress reports, including work final research report, which documents the process and
completed to date, remaining work, potential problems, results (e.g., of the pilot workshops) but is separate from
and budget and schedule status; the guide and implementation materials.
34

Appendix C
Gap Analysis
Research was conducted to ascertain what gaps exist in the Transportation Project Costs, consisted of members also on
current FHWA Risk Guide and associated implementation the SHRP 2 Project R09 research team. These researchers
materials with respect to application in rapid renewal proj- developed a state-of-practice survey to identify how different
ects. The gap analysis leading to the development of a detailed transportation agencies and organizations determine contin-
work plan (Task 1) consisted of the following: gencies and manage risk-related costs throughout the project
development process. The team received responses from
• Literature review (see Appendix A) 48 of the 52 state highway agencies, from four Canadian
• Review of ACTT program (see Chapter 2) agencies, and from more than 130 individuals. Beyond receiv-
• Agency surveys and interviews (see this appendix below) ing responses to the survey questions, the team received many
• Summary of industry experience (see this appendix below) e-mail and web addresses with which to find additional
• Review of existing guidelines (see Chapter 2) agency information. California, Ohio, and the FHWA sent
their risk and contingency planning guides. Other agencies
The gap analysis and the resulting detailed work plan for provided web links. This information provided the team with
completing the project are summarized in this appendix. a snapshot of current practice in setting contingencies and
dealing with risk.
Figure C.1 displays the results of two survey questions. They
Surveys are Numbers 10 and 19:
An important part of the research under this project (both in
Task 1 and in Task 2) was to obtain relevant information from 10. Does your organization have a formal, published defini-
state departments of transportation (DOTs). This research tion for contingency that is used consistently throughout
into DOTs consisted of the following: the estimating process?
19. Does your organization have a formal, published project
1. A recent successful survey of DOTs regarding their risk risk management policy or procedures?
management programs—conducted by members of the
research team under a separate contract (see Chapter 2). As seen in Figure C.1, only one in five agencies has a formal
2. Development of a rapid renewal survey to follow up on published definition for contingency that is used consistently
DOTs’ experience with rapid renewal projects and their throughout the estimating process, and only one in 10 agen-
risks, conducted under this project (in Task 2), and sub- cies has a formal, published project risk management policy
sequent interviews with DOTs and with other SHRP 2 or procedure. Both of these results describe the need for
Renewal contracts (see Chapter 2 and Appendix D). research into standard risk management practices and analy-
sis tools. The research team was not surprised at the small
number of published risk management policies and proce-
Previous State-of-Practice Survey dures. The literature review confirmed that the use of risk
management for cost estimating and project management is
Introduction
an emerging trend in the highway sector. However, the
The research team on NCHRP Project 8-60, Guidebook on research team was surprised by the low number of agencies
Risk Analysis Tools and Management Practices to Control that have a published definition for contingency. The use of
35

36
Published Project Risk Management managers who join together to develop estimates; and a com-
Policy or Procedures
bination of the first two categories. Table C.1 provides a sum-
47 of 52 State Agencies
mary of the survey results.
Yes As Table C.1 shows, few agencies maintained a separate
9%
group solely for estimating. Only about one-third of them
have such a separate group to support designers and manag-
ers in the planning stage and programming and preliminary
design stage. This proportion rose to over one-half for the
final design stage. This decentralized estimating function in
No
the early stages of planning and project development implied
91% that the risk management function must also be decentral-
ized, or at least not solely dependent on a central risk man-
agement unit.
Published Definition for Contingency
48 of 52 State Agencies For the planning phase, the Illinois DOT was the only state
agency that solely used a separate estimating group. A strong
Yes
19%
majority of the state agencies—31 of the 48 that responded—
left the responsibility for estimating to the planners at this
stage. The remaining 16 state agencies used a combination of
both methods. These planners could have been internal
agency planners, consultants, or metropolitan planning orga-
nizations, depending on the agency.
No
For the programming and preliminary design phase, no
81%
respondents used a separate estimating group. Again, a large
Figure C.1. Current state of majority of the state agencies—32—relied solely on designers
practice in contingency and risk and project managers to develop the cost estimates. The same
management. 16 states used a combination of both methods.
For the final design phase, agencies from only two states,
Mississippi and Wyoming, solely used a separate estimating
contingency becomes linked to risk management in the esti- section. At this stage in project development, 21 of the
mating phase of project development. In the early planning 48 state agencies relied solely on designers and project man-
stages of a project, contingencies represent the project’s agers while the majority used both a separate group and
uncertainties. If agencies want to be effective in managing designers and project managers.
project costs and controlling cost escalation, it is essential to The survey asked for the names of separate estimating sec-
recognize contingencies (uncertainties) and include them in tions. Table C.2 provides a listing of the estimating section
their early cost estimates. An important first step in that rec- names to provide a sense of who is supporting the planners,
ognition is for agencies to develop and publish a definition of designers, or project managers with their estimating tasks.
contingency; doing so provides for its transparent and consis-
tent application and helps promote accuracy in cost estimates
throughout project development. Table C.1. Agency Organizations for
Creating Estimates
Agency Estimating Organizations Type of Organization Used
To develop an applicable guide for risk management practices Planners,
aimed at controlling transportation project costs, it is essen- Phase of Project Separate Designers,
tial to understand how an agency organizes itself to create Development Group of and Project Combination
Process Estimators Managers of Both
cost estimates during the project development process. This
research project simplified the project development process Planning 1 (2%) 31 (65%) 16 (33%)
to three distinct phases: planning, programming and prelimi- Programming 0 (0%) 32 (67%) 16 (33%)
nary design, and final design. In discussions with agencies, and preliminary
design
the research team found that organizations for creating esti-
mates fell into three categories: a separate section that is solely Final design 2 (4%) 21 (44%) 25 (52%)
responsible for estimates; planners, designers, and project Note: 48 of 52 state agencies reporting.

37
Table C.2. Agency Estimating Sections the project scope is most uncertain. As the level of informa-
tion increases, estimate certainty increases and point esti-
State Separate Section mates become more reliable.
Arizona Contacts and Specifications Section The results of this survey show that range estimates are
California Structure Estimates
being used to communicate project cost estimates. The guide
presents tools to help agencies accurately and consistently
Connecticut Office of Contract Development/Estimating
estimate appropriate ranges.
Georgia Estimating Section
Illinois Bureau of Design and Environment
Risk Management Practices
Iowa Department of Contracts
Risk is inherent in every capital transportation project. Risk
Kentucky Construction Procurement Estimating Branch
is defined in the dictionary as the possibility that something
Minnesota Engineering Cost Data and Estimating Unit
unpleasant or unwelcome will happen. In this study, risk is
Nebraska Highway Estimating Section defined as an uncertain event or condition that, if it occurs,
New York Estimating Section has a negative or positive effect on a project’s objectives. Risk
North Carolina Estimating Section
management involves all of the steps associated with manag-
ing risks: risk identification, risk assessment, risk analysis
Ohio Office of Contracts and Estimates
(qualitative or quantitative), risk planning, risk allocation,
Oregon Estimating Unit and risk monitoring control.
South Dakota Project Development Unit
Tennessee Conceptual Design and Estimates State-by-State Risk Management
Program Development and Contingency Application
Construction Estimating
While risk is indeed inherent in every capital transportation
Virginia Scheduling and Contracts Division project, the survey found that only three of the 48 state agencies
Final Cost Estimating Section had a formal, published project risk management policy or
Washington Strategic Analysis and Estimating Office procedures. In these three states, it was clear how the risk analy-
sis related to controlling cost escalation. In the other states, the
Wyoming Contracts and Estimates Section
manner in which the agencies set their project and program
contingency implied that they recognize and incorporate risks
into project estimates, just not in a formalized risk manage-
Table C.3 summarizes the use of ranges by agencies to ment procedure. The following paragraphs describe how
communicate estimates. The results of the survey showed different states set contingency and analyze risk in projects.
that over half the states were using ranges to communicate
estimates. The results also showed, as expected, a decrease in California
the use of ranges as projects developed. Theoretically, the The California State Department of Transportation (Caltrans)
communication of estimates through ranges would be most has different definitions for contingency based on the phase
appropriate at the earliest stages of project development when of the project. The Caltrans Project Risk Management Handbook
defines contingency as the amount of money or time needed
above the estimate to reduce the risk (Caltrans 2007). The
Table C.3. Agency Use of Ranges to Caltrans Project Development Procedures Manual (PDPM)
Communicate Estimates states that contingency factors for project planning cost esti-
mates vary depending on the cost estimate type.
Never Use Sometimes Always Use Contingencies are intended to compensate for the use of
Ranges Use Ranges Ranges limited information. The percentage goes down as the project
Project Phase (%) (%) (%)
becomes more defined and thus less unknown. As stated in
Planning 36 55 9 the PDPM, contingencies are not intended to take the place
Programming 53 38 9 of incomplete design work. Project alternatives and their
and preliminary associated cost estimates must be thoroughly compiled by
design diligently using all of the available data, modifying that data
Final design 70 19 11 with good judgment, and using past cost estimating experi-
Note: 48 of 52 state agencies reporting. ence so that the cost estimates can be used with confidence.

38
Table C.4 shows the contingency breakdown based on type of Table C.5. Florida Sliding-Scale
estimate. Contingency
Caltrans has developed a capital project risk management
Project Unknown
process, which is intended to result in the effective manage-
Project Phase Factor (%)
ment of project risks (threats and opportunities). The objec-
tive of the process is to help project sponsors and teams make Initial cost estimate 25
informed decisions regarding project alternatives. Together Design scope of work 20
the project manager, sponsor, and team members develop a Design Phase I (30%) 15
plan for how to identify, assess, quantify, respond to, monitor,
Design Phase II (60%) 10
and control capital project risks. If a quantitative risk analysis
Design Phase III (90%) 5
using the capital project risk management process shows that
the contingency percentage is inadequate, an exception can Design Phase IV (100%) 0
be made to exceed this number (Caltrans 2007).
This summary of the Caltrans process was written primar-
ily from the survey response. An in-depth case study of the Missouri
Caltrans risk management process is provided in the NCHRP The project manager and design team evaluate risks and
8-60 report. include the consideration of risk in the estimate. The survey
response stated that this is not done through a formal risk
Florida analysis such as a Monte Carlo simulation but indicated that
The Florida DOT (FDOT) does not have a formalized defini- the input collected from varied sources is similar to what a
tion of contingency. However, the state does employ both pro- risk assessment workshop would yield.
gram and project contingencies. FDOT has a program
contingency that is applied across the board on all projects. Montana
Each district, based on its available funds, sets the contingency The Montana DOT has a formal definition for both contin-
amount. This contingency is a general catchall but includes gency and risk. Contingency means an event that may occur
project changes, additional projects added to the program, cost but is not likely or intended. It is a possibility, condition of
increases, and supplemental agreements (change orders). There chance, for which there must be a plan of action (or additional
is also a project contingency (known as project unknowns) that money). Risk is a possibility of suffering harm or loss. The
is used to cover scope additions/refinements and bid unit price Montana DOT considers contingency and risk in terms of
escalations. Table C.5 provides FDOT’s general guide for deter- quantifiable and nonquantifiable outcomes. Contingency is
mining the project unknown factor in each estimate. an amount added to the project cost to account for the effects
of incorrect quantities or unit costs, the possibility of unknown
Maryland conditions or events, unforeseen project requirements, and
The Maryland DOT does not have a formal definition of con- other project risk. The agency did not provide a standard set
tingency but does have a guide that is used as estimates are of contingency percentages to cover the identified risk.
developed with the project phases. The agency sets the guid-
ance, but the engineers/project managers have discretion Nevada
based on the level of engineering done for each phase. The The Nevada DOT did not provide a formal definition for
survey response stated that the estimator’s discretion is based contingency or risk management. However, the agency has a
on a general risk analysis of how confident the DOT is that published procedure that documents a sliding scale for con-
the cost estimate includes the entire project scope. The gen- tingency at three levels. Table C.7 lists these percentages.
eral percentages of contingency can be seen in the Table C.6. During the course of a project’s development, the division
establishes a level of confidence for the project data called a
Table C.4. Caltrans Sliding-Scale

Contingency Table C.6. Maryland Sliding-Scale
Contingency
Estimate Type Contingency (%)
Project Phase Contingency (%)
Planning estimates 25
Planning 35–40
General plan estimates 20
Programming and preliminary design 25–35
Marginal estimate/final PS&E 5
Final design 0–25
Note: PS&E = plans, specifications, and estimates.

39
Table C.7. Nevada Sliding-Scale Contingency Ohio

The survey respondents from the Ohio DOT believe that rea-
Project Phase: Level of Design Confidence Contingency (%) sonable contingencies should be built into the total project
Preliminary design: Design Level 1 15 budget estimate. Although contingencies are not included for
Intermediate design: Design Level 2 10
the final engineer’s estimate, a contingency based on different
levels of design completion are included in the project’s total
Final design: Design Level 3 3
cost estimate. For example, at the beginning of the detail
design, a design development contingency around 30% may
be appropriate. As the actual design approaches 100%, the
design level. These levels indicate to design managers, in very design development contingency should approach 0%. These
general terms, how much confidence they can have in project contingencies may be developed based on previous historical
information currently available to them. The design team data for projects of similar type and size.
must keep the accuracy of the schedule and estimate compat- The Ohio DOT also e-mailed the research team a copy of
ible with the design level of the project. its Excel-based procedure for construction budget estimat-
During preliminary design, the confidence level is at ing. It has multiple areas that address risk and contingency,
Design Level 1. The project schedule should be based on the including design contingency, constructible risk/contingency,
work breakdown structure template for the appropriate and inflation contingency. A process for determining each of
project type. The schedule should be maintained using his- these three contingency values is described in the procedure.
torical data from previous projects of similar nature, conver- Figure C.2 shows a sliding-scale contingency for design from
sations with major project contributors, and the judgment the procedure.
of experienced project management professionals. A project
coordinator should be able to predict the quality assurance Utah
(QA) review submittal date to within 3 to 6 months. At this The Utah DOT develops contingencies on a case-by-case
level the design team should maintain the estimate using basis. The agency provides some initial suggested values but
rough estimating techniques, the best information readily allows the designers/developers to use independent judgment
available, and 15% for contract contingencies. The design to finalize the correct contingency. The initial suggested val-
team should always develop its own estimates and not rely ues were not specified by the survey respondents. However,
on previous attempts. the respondents did state that a 10% change order contin-
During the intermediate design, the confidence level is gency is added on all projects at advertisement.
upgraded to Design Level 2. The schedule should be corre-
lated with the final scope to include all remaining tasks and Virginia
be maintained using man-hour estimates, detailed conver- Standard practice is to use 10% for contingency on the con-
sations with major project contributors and the judgment struction phase. However, project managers do have the flex-
of experienced project management professionals. A project ibility to ask for an increased contingency if unique aspects of
coordinator should be able to predict the QA review sub- the project have a higher associated risk. Means and methods
mittal date to within 1 to 3 months. At this level the estimate for setting contingency would be unique to the project and
should reflect costs for all work being contemplated, and the based on a risk profile that highlights probability and impact.
design team should have rough calculations to back them
up. There should be few, if any, lump sum “guesstimates” at Washington
this level. All items of work should be identified, the associ- The Washington State DOT (WSDOT) defines contingency as
ated units of work should be incorporated into the engi- a markup applied to account for substantial uncertainties in
neer’s estimate, and the contract contingencies should be set quantities, unit costs, and minor risk events related to quanti-
to 10%. ties, work elements, or other project requirements. WSDOT
During final design, the confidence level is changed to uses a combination of a standard predetermined contingency
Design Level 3. The schedule should be based on the actual and a risk-based analysis. Table C.8 provides the standard pre-
man hours needed to complete the remaining work and guar- determined contingencies from the survey response.
anteed delivery dates from major project contributors. A For all projects over $25 million, a formal risk analysis
project coordinator should be able to predict the QA review is performed and a range estimate and risk register of
submittal date to within 1 to 3 weeks. At this level, the esti- identified risk events are produced. From this risk profile,
mate should be based on actual units of work, the associated the higher end of the range, usually the 90th percentile,
quantities should reflect checked calculations, and contract is selected. A miscellaneous item allowance percentage is
contingencies should be set to 3%. also applied to the design depending on the development

40
Contingency
Stage of Design
Figure C.2. Ohio DOT design completion contingency guidelines for cost estimating of
major projects.
level of the project. The general percentages can be seen in Conclusions

Table C.8.
The state-of-practice survey provided valuable information
WSDOT has developed a cost risk assessment (CRA) pro-
for the research team. It clearly demonstrated the need for
cess. CRA describes a broad program of risk-based assess-
guidance on risk management and estimation of contingen-
ments being conducted within WSDOT. CRA also describes
cies. It highlighted common tools currently being used by
a workshop process similar to but less intense than WSDOT’s
agencies. When mapped against the literature review, the sur-
Cost Estimate Validation Process (CEVP). Risk management
vey also revealed tools for risk analysis and risk management
is an integral part of the WSDOT project management pro-
that are absent from the transportation sector. Finally, the
cess. A key difference between conventional estimating and
survey pointed to the best agencies to interview in the next
CEVP/CRA is the representation of project cost and schedule
phase of this research.
as a distribution (range) rather than as a point estimate. A
major aspect of the CEVP/CRA method is to parse a conven-
tional project estimate into those components representing Rapid Renewal Survey
base and those representing risk. The risk elements, treated as
A rapid renewal survey, which followed up on the state-of-
variables, are then described in terms of their possible conse-
the-art survey, was conducted with state DOTs to focus on
quences and probability of occurrence.
rapid renewal risks. A draft of the survey questionnaire was
developed during Task 1. After further research, the survey
was revised and streamlined under Task 2. The final version
Table C.8. Washington State Sliding-Scale of the rapid renewal survey is presented in Appendix D.
Contingency
Project Phase Miscellaneous (%)

Summary of Industry
Experience
Planning 30–50
As previously noted, several of the research team members
Programming and preliminary design 20–30
have extensive experience in managing risks for rapid renewal
Detailed design 10–20
projects. Some of this experience is summarized in Table C.9.

41
Table C.9. Rapid Renewal Elements from Previously Conducted Risk Assessments by Golder
Associates Inc.
Owner Project Existing Facility? Rapid Renewal Elements Notes
Colorado DOT I-70 Mountain Yes • Opportunity to use alternative Overall, not a rapid
Corridor delivery method (e.g., design–build; renewal project
CM/GC). (conventional delivery
• Opportunity to use separate (early) method anticipated;
procurement contracts for owner- funding constrained),
supplied materials or other major but there may be
specialty items. opportunities to incor-
porate rapid renewal
elements.
Florida DOT I-595 Corridor Yes • Fund and deliver using PPP www.i-595.com/faq
Improvements (DBFOM) to complete improve- .aspx
(Fort Lauderdale) ments up to 10 years sooner than if
delivered conventionally.
• Replace aging facility with minimal
disruption to traffic during
construction.
Florida DOT US-92 near DeLand Yes • Minimize disruption during con- New approach for
struction (reduce lane closures, FDOT.
reduce intersection closures) by
using precast, posttensioned con-
crete panels at critical intersections
and high early-strength concrete to
shorten curing times for the rest of
the roadway.
Florida DOT First Coast Outer No • Fund and deliver using PPP
Beltway (DBFOM) to complete improve-
ments years sooner than if delivered
conventionally.
Iowa DOT Council Bluffs Inter- Yes • Early utility relocations. Overall, not a rapid
state System renewal project
Improvements (design–bid–build,
Project funding constrained).
Iowa and Illinois Illinois–Iowa Corri- Yes • Early utility relocations. Overall, not a rapid
DOTs dor Project (I-74, renewal project
including Missis- (design–bid–build,
sippi River funding constrained).
crossing)
Kane County, Stearns Road/Fox Mostly no (improving • Advance steel-fabrication contract Otherwise, not a rapid
Illinois River Bridge existing and extending for bridge steel. renewal project.
into new alignment; the
bridge is a new crossing
over the Fox River)
Nevada DOT NEON Yes (I-15) • Considering alternative funding/ Risk assessment not yet
delivery (PPP). done on this project.
Pennsylvania DOT/ Pennsylvania High- No • Early design and procurement of Overall, not a rapid
Port Authority of Speed Maglev guideway steel beams. renewal project. Not
Allegheny • Design–build delivery system for sure this project is
County civil construction. moving forward (no
• Early right-of-way acquisition for news on website
early utility relocations. dated later than 2005).
Port Authority of PATH (World Trade Yes (replacing existing • Alternative project delivery method
New York and Center Site) facility destroyed in (CM/GC).
New Jersey 9/11 attacks)
Utah DOT I-15 NOW Yes • Design–build delivery.
• Early right-of-way acquisition.
• Early utility relocation.
(continued on next page)

42
Table C.9. Rapid Renewal Elements from Previously Conducted Risk Assessments by Golder
Associates Inc. (continued)
Owner Project Existing Facility? Rapid Renewal Elements Notes
Utah DOT I-15 South Yes • Design–build delivery.

• Early utility relocation.
Utah DOT Mountain View No • Design–build delivery.

Corridor • Early right-of-way acquisition for
early utility relocation.
Washington State Everett High- Yes • Design–build delivery system to Completed.
DOT Occupancy speed delivery of urban project.
Vehicle (HOV)
Project
Washington State SR-99/Alaskan Yes • Opportunity to use alternative Overall, not a rapid
DOT Way Viaduct delivery method for one or more renewal project
Projects projects. (conventional delivery
• Early right-of-way acquisition. method anticipated),
• Early utility relocations. but there may be
opportunities to
incorporate rapid-
renewal elements.
Washington State SR-167 High- Yes • Design–build delivery to quickly Completed.
DOT Occupancy Toll implement civil and systems
(HOT) Lanes construction of demonstration
HOT lanes.
Washington State I-405 Corridor Yes • Design–build delivery. Various phases of
DOT design and
construction.
Washington State SR-519 Yes • Design–build delivery.
DOT
Washington State SR-509 Yes • Design–build delivery being consid-
DOT ered, but project is unfunded.
Washington State Various projects Yes • Early right-of-way acquisition and/or Generally not rapid
DOT (e.g., SR-304 early utility relocations. renewal projects, but
Bremerton tun- they employ one or
nel; SR-522 Sno- more rapid renewal
homish River elements.
Bridge)
Note: PPP = public–private partnership; DBFOM = design–build–finance–operate–maintain; CM/GC = construction manager/general contractor.
Task 1 Report revisions and updates to FHWA’s Guide to Risk Assessment and
Allocation for Highway Construction Management (Risk Guide),
After completion of Task 1, to develop a detailed work plan for which focus on rapid renewal projects. These recommenda-
the entire project, the project team documented its work in a tions also drew from recently conducted FHWA risk work-
report. In addition to reporting the results of the gap analysis, shops. Tables C.10 and C.11 summarize these suggested
the Task 1 Project Report documented the recommended revisions to the Risk Guide and accompanying materials.

43
Table C.10. Suggested Revisions or Updates to FHWA’s Guide to Risk Assessment and Allocation
for Highway Construction Management (Risk Guide)
Location Suggested Revision or Update Reason Reference
New Chapter 2 Add a new chapter on developing a project “baseline” Establishing a project baseline (i.e., FHWA workshop train-
for risk assessment. A project baseline consists of the project without risk) is an impor- ing materials (MS
(1) identifying and documenting key project assump- tant first step in the risk assessment PowerPoint slides
tions, scope, delivery strategy, and baseline costs process, because risks must be with notes). Included
and (2) developing a sequence of major activities identified and measured against as an appendix.
(flowchart) and baseline schedule. An approximately some baseline. While the current
five-page chapter would be required to describe this version of the Risk Guide addresses
content. This chapter would be consistent in style identification, assessment, man-
and detail with the existing chapters in the Risk agement, monitoring, and tracking
Guide. This would be the new Chapter 2. of risks, it does not address the
concept of a baseline or how to
develop a baseline.
New Chapter 9 Add a new chapter on implementing the guidance pre- The existing Risk Guide presents a FHWA workshop train-
sented in previous chapters of the Risk Guide. This philosophy and set of concepts ing materials (MS
chapter would present step-by-step instructions for but doesn’t provide specific infor- PowerPoint slides
implementing the Risk Guide to conduct identifica- mation or detail required to actu- with notes; risk
tion, assessment/prioritization, and management of ally implement those concepts “forms” in MS Word)
cost and schedule risks for many projects (i.e., how and conduct risk assessments on and FHWA risk man-
to implement the guidance in the new Chapter 2 and real projects. agement spread-
renumbered Chapters 3, 4, and 6). This chapter sheet template (in
would summarize (and reference) the more-detailed MS Excel). Included
FHWA workshop training materials and MS Excel as appendices.
FHWA risk management spreadsheet template and
forms (in appendices), which were designed as tools
to help project managers implement the Risk Guide.
A discussion would be added regarding how to set
up a program within a DOT to conduct such risk
assessment/management. This 10–15-page chapter
would be the new Chapter 9.
New Appendix E Include the FHWA workshop training materials The FHWA workshop materials were FHWA workshop train-
(including the MS PowerPoint slides printed with designed to serve as (1) a more ing materials (MS
Notes pages, as well as forms and other materials) detailed set of information on the PowerPoint slides
as the new Appendix E to the Risk Guide. concepts presented in the Risk with notes; risk
Guidelines and (2) a set of instruc- “forms” in MS Word).
tions on how to implement ele-
ments of those concepts for project
risk assessment/management.
New Appendix F Include the FHWA risk management spreadsheet The FHWA risk-management FHWA risk manage-
(electronic) template as an electronic attachment (Attachment spreadsheet template (in elec- ment spreadsheet
A or Appendix F). tronic form) can be used directly template (in MS
by project teams to help conduct Excel).
a risk identification, assessment/
prioritization, and management
exercise for many projects.
New Appendix G Add an appendix discussing application specifically Risk assessment/management SHRP 2 R09 guide and
to rapid renewal projects. This would include the methods/guidance are generally the implementation
following: same for rapid renewal projects as materials.
1. Expansion of performance objectives regarding for other projects. However, there
baseline and risks; are some unique aspects associ-
2. Inventory of rapid renewal methods; ated with rapid renewal projects,
3. Changes in baseline model for specific rapid so the FHWA forms and template
renewal methods; cannot always be used directly.
4. Checklist of risks and their potential mitigations for These unique aspects need to be
each rapid renewal method; identified and the methods/tools
5. Modification of risk “forms” (in MS Word) and risk appropriately modified to deal with
management template (in MS Excel) for additional them. This will allow project teams
performance objectives and baseline models to to conduct a risk identification,
cover rapid renewal projects; assessment/prioritization, and
6. Example; and management exercise for rapid
7. References/bibliography. renewal projects.

44
for Highway Construction Management (Risk Guide) (continued)
Existing Modify/update the existing Chapters 1–8 as needed Make the existing chapters consistent FHWA workshop train-
Chapters 1–8 based on work done for the FHWA workshop/short- with revisions and modifications ing materials (MS
(i.e., Chapter 1, course development, referencing new Appendix G that resulted from development and PowerPoint slides
and renumbered for unique aspects regarding rapid renewal. These delivery of the FHWA workshops. with notes). Included
Chapters 3–8 chapters would be Chapter 1 and the renumbered However, those methods/guidance as appendix.
and 10) Chapters 3–8 and 10. (Note: This is a generalized are not applicable to all projects
comment that will require a complete pass through (e.g., some rapid renewal projects).
the guidelines to ensure complete consistency with Refer to new Appendix G for these
the workshop training materials. Not all of these special cases.
changes, many of which are editorial in nature, are
listed in this table. However, some of the more signif-
icant suggested modifications and revisions are
called out in individual items below.)
Appendices A–D Modify/update the existing Appendices A–D as needed Make the existing chapters consis- FHWA workshop train-
based on work done for the FHWA workshop/short tent with revisions and modifica- ing materials (MS
course development. (Note: This is a generalized tions that resulted from PowerPoint slides
comment that will require a complete pass through development and delivery of the with notes). Included
the appendices to ensure complete consistency with FHWA workshops. as appendix.
the workshop training materials.)
Existing Chapters 1 Modify/update the existing hypothetical (QDOT) case The existing description of the hypo- FHWA workshop train-
(p. 9), 2 (pp. 13, study as needed based on work done for the thetical project was enhanced for ing materials (MS
14), 3 (p. 20), 4 FHWA workshop/short course development. This use in the FHWA workshop’s Word document with
(p. 26), 5 (p. 30), 6 hypothetical case study is referred to in most exist- practical exercises. The hypotheti- hypothetical project
(pp. 25, 26), and ing chapters of the Risk Guide, so it would need to cal description now includes more description and
7 (p. 40) be updated appropriately throughout the Risk detail, as well as a baseline schematic). Included
Guide. description and descriptions of as appendix.
potential cost and schedule issues
in multiple disciplines.
Existing Chapter 1 1. Update risk management process figure (Figure 5) 1. To ensure consistency with modi- 1. FHWA workshop
to include Define Baseline step. Make the same fications/revisions mentioned training materials
modification anywhere else this process diagram previously. (MS PowerPoint
occurs. 2. Generally, the primary reason for slides with notes).
2. Discuss project overruns, as well as the need to conducting risk assessment/ 2. FHWA workshop
compare alternatives with different risk profiles, as management is to reduce the training materials
other reasons for conducting risk assessment/ actual ultimate project cost and (MS PowerPoint
management. schedule and to get more for the slides with notes).
3. Add discussion of why risk management is partic- money and/or prevent overruns 3. Rapid renewal
ularly critical to rapid renewal projects. A definition (which often happen with inventory.
of rapid renewal projects will be provided here, sometimes disastrous
and it will be noted that most of the unique consequences).
aspects of rapid renewal projects will be covered 3. To ensure a focus on rapid
in Appendix G. renewal projects and describe
why risk management is different
on these projects.
Existing Chapter 2 Add a more-comprehensive risk checklist as a The existing example lists are illus- FHWA workshop train-
and Appendix B resource, or replace one or more of the existing trative, but none are particularly ing materials (MS
examples with a more comprehensive checklist. comprehensive because they Word document with
Refer to Appendix G for rapid renewal–related risk come from one owner or type of a more comprehen-
lists. project. A more comprehensive sive, generic risk
Also, point out the following: and generic list based on many checklist). Included
1. Risk registers (charters) need to be comprehen- risk assessments for multiple own- as appendix.
sive, nonoverlapping lists of risks and ers and project types could be
opportunities; and useful to agencies that are new to
2. Risk checklists, although intended to be compre- risk assessment.
hensive in a generic way, are often at different
levels of detail and not necessarily intended to be
nonoverlapping lists of risks (i.e., they are not
proper risk registers or charters).

45
for Highway Construction Management (Risk Guide) (continued)
Existing Chapter 3 1. Modify the presentation Risk Screening (Section 1. The method presented in the FHWA workshop train-
3.4 and on, and related figures) to include two existing Risk Guide is vague and ing materials (MS
additional risk identification and rating/ranking often misused. Alternative meth- PowerPoint slides
methods. Also include a comparison of the pros ods are available, depending on with notes) and
and cons of the three presented methods for iden- the owner’s risk-identification and FHWA risk manage-
tifying and rating/ranking risks. rating/ranking objectives. Two ment spreadsheet
2. Discuss subjective assessments and biases. such methods were presented in template. Included
detail in the FHWA workshop/ as appendices.
short course, and the FHWA risk
management spreadsheet tem-
plate has one of these methods
built into it.
2. Due to the general lack of repre-
sentative databases, most
assessments will be subjective
(i.e., based on opinion). Such
subjective assessments are prone
to bias, which must be recog-
nized and mitigated to the extent
possible.
Existing Chapter 4 Modify discussion of the following: 1. The impact of any particular fac- FHWA workshop train-
1. Sensitivity to consider impacts on target percentile tor on the budget (which is typi- ing materials (MS
of escalated cost rather than on either (but not the cally a target percentile of the PowerPoint slides
combination of) the mean or variance of various total escalated cost) is typically of with notes). Included
performance; and most interest in prioritizing risks. as appendix.
2. Correlation among uncertain factors. 2. Correlations among uncertain
factors have a major impact on
the results. If correlations (which
are most often positive) are
ignored, then the uncertainty in
the outputs (and thus in the target
percentile) is underestimated.
Existing Chapter 5 Add discussion of the following: Guidance is needed on how to eval- FHWA workshop train-
1. Evaluation of potential risk mitigation actions; uate mitigation actions, how to ing materials (MS
2. Determination/management of contingency draw- determine appropriate contin- PowerPoint slides
down (currently in Chapter 7.4); and gency for various project mile- with notes) and
3. Recovery plans. stones, and how to develop an FHWA risk manage-
appropriate recovery plan (if con- ment spreadsheet
tingency is inadequate). template. Included
as appendices.
Existing Appendix A Add summary/reference to case studies developed The methods presented in the work- FHWA case studies.
as part of research projects for FHWA (TxDOT, shops were successfully imple-
FDOT, CDOT, VDOT). mented on projects, which have
been adequately documented in
separate case studies.
Existing Glossary Refine and add definitions, as needed. The glossary is incomplete and FHWA workshop train-
needs to be consistent with modi- ing materials (MS
fications/revisions mentioned PowerPoint slides
previously. with notes). Included
as appendix.
Existing References Add items as needed. Many additional references were FHWA workshop train-
and Bibliography used in the development of the ing materials (MS
FHWA workshop training PowerPoint slides
materials. with notes). Included
as appendix.

46
Table C.11. Suggested Revisions or Updates to Implementation Materials
New Module 8 Add a module discussing application specifically Risk assessment, management meth- SHRP 2 R09 guide
to rapid renewal projects. This would include: ods, and guidance are generally the and implementation
1. Expansion of performance objectives regard- same for rapid renewal projects as materials.
ing baseline and risks; for other projects. However, there
2. Inventory of rapid renewal methods; are some unique aspects associ-
3. Changes in baseline model for specific rapid ated with rapid renewal projects, so
renewal methods; the FHWA forms and template can-
4. Checklist of risks and their potential mitiga- not always be used directly. These
tions for each rapid renewal method; unique aspects need to be identi-
5. Modification of risk “forms” (in MS Word) and fied and the methods/tools appro-
risk management template (in MS Excel) for priately modified to deal with them.
additional performance objectives and baseline This will allow project teams to con-
models to cover rapid renewal projects; and duct a risk identification, assess-
6. Example. ment/prioritization, and
management exercise for rapid
renewal projects.
Existing software training Modify training to include different forms and Different forms and templates will SHRP 2 R09 guide
templates for rapid renewal projects. probably be used for rapid and implementation
renewal projects. materials.
All other training materials Modify/update all the existing training materials Most of the risk assessment/man- SHRP 2 R09 guide
as needed based on work done for the SHRP 2 agement methods will be the and implementation
R09 development. This would probably include same for traditional and for rapid materials.
primarily adding reference (as appropriate) to renewal projects. The unique
new Module 8 in the slide notes. aspects of rapid renewal projects
will be contained in one module.

Appendix D
Other Research Activities and Results
The key elements of the SHRP 2 R09 project research include innovative equipment and the coordination with utilities/
the following: stakeholders. Risk management actions included use of
innovative delivery methods (design–build and CMR)
• Establishing appropriate rapid renewal project perfor- and facilitated partnering sessions with utility partners.
mance objectives and related measures; 2. Research engineer, assistant director, Texas Center for Trans-
• Developing inventories of rapid renewal methods, risks, portation Research. The interview focused on the High
and feasible management actions; Five Project in Dallas, which was constructed from 2001
• Establishing an appropriate risk management process; to 2007. The main risk categories involved accelerated
• Developing a template for documenting assessments (also bridge design, off-site prefabrication of bridge elements,
forms) and automatically calculating performance mea- and the use of delayed-start contract provisions to allow
sures, consistent with that process; and contractors to prepare for in-traffic work before starting.
• Developing the guide, training materials, and other work- Risk management actions included the use of perfor-
shop materials. mance specification for bridge design, lane rental provi-
sions, incentives/disincentives, and extensive public
Of these key elements, all except additional surveys con- outreach.
ducted to support development of inventories are adequately 3. Director, construction, Texas Department of Transportation
discussed in the main text and in other appendices or are cov- (TxDOT). The interview focused on the I-10 program of
ered in the guide. The following section provides more details nine accelerated projects in Texas that was constructed
on these additional surveys. from 2003 to 2008. The main risk categories were the coor-
dination risk of maintenance of traffic and utilities on
phased projects. Risk management actions included hiring
Follow-Up Survey
a general engineering consultant to coordinate contracts
A draft survey for DOTs was developed early on in the project with a focus on maintenance of traffic and utilities. TxDOT
and then later revised under Task 2 to more efficiently solicit also employed incentives and disincentives at contract
information on rapid renewal methods, their risks, and pos- coordination points.
sible mitigation from DOTs (see final version of question- 4. Senior transportation engineer, partnering coordinator,
naire in Figures D.1 and D.2). The team completed interviews California Department of Transportation (Caltrans). The
with select DOT personnel. The results of those interviews interview discussed the Fix I-5 in Sacramento, which was
are summarized as follows: recently completed; it accelerated a 305-day project to
35 days through a full closure approach and use of innova-
1. Deputy preconstruction engineer, Utah Department of Trans- tive materials. The main risk categories involved public
portation (UDOT). The interview focused on UDOT’s relations, management of traffic, and failure of innovative
accelerated bridge construction (ABC) program for pavement materials. Risk management actions included
17 bridges using self-propelled modular transporters early and continuous stakeholder interaction and com-
(SPMTs), which is currently in design and construction. munication. Caltrans also conducted extensive mix design
The main risk categories involved the potential failure of research and off-site testing.
47

48
Project Number SHRP 2 R09

Guide for the Process of Managing Risk on
Rapid Renewal Projects:
Short (Fifteen Minute) Survey Questionnaire on Managing Risk on Rapid Renewal Projects
You are invited to participate in a study of managing risk on rapid renewal projects under the SHRP 2
program. Our project (R09) will develop a guide for risk management on rapid renewal projects. The
guide is intended for use by transportation agencies to manage risk during the project development
process. The guide will address methods for risk identification, assessment, analysis, mitigation,
allocation, and monitoring, including methods to objectively prioritize risks and to objectively evaluate
their mitigation/allocation. As part of developing the guidelines, the guidelines will be applied to at
least two projects (case studies) and materials will be developed to implement the guidelines for these
projects.
Background
To address the challenges of moving people and goods efficiently and safely on the nation’s highways,
Congress has created the second Strategic Highway Research Program (SHRP 2). SHRP 2 is a targeted,
short-term research program carried out through competitively awarded contracts to qualified
researchers in the academic, private, and public sectors.
SHRP 2 addresses four strategic focus areas: the role of human behavior in highway safety (Safety);
rapid highway renewal (Renewal); congestion reduction through improved travel time reliability
(Reliability); and transportation planning that better integrates community, economic, and
environmental considerations into new highway capacity (Capacity). The Risk Guidelines are being
developed under the Renewal Focus Area.
The overall goal of the SHRP 2 Renewal program is to develop a consistent, systematic approach to
performing highway renewal that is rapid, causes minimum disruption, and produces long-lived
facilities, as well as satisfies the other transportation development objectives (e.g., minimum capital
cost, minimum environmental impacts, maximum transportation benefits, etc.). The renewal scope
applies to all classes of roads.
Additional background on this topic is presented in the Task 1 (Gap Analysis and Detailed Plan) Report
for this project, which is available from Dr. W. Roberds of Golder Associates by phone at xxx-xxxx or
by email at xx@xxx.com.
Figure D.1. Final survey questionnaire (page 1).
5. Project manager Region 1, Colorado Department of ROW acquisition issues. Risk management actions
Transportation (CDOT). The interview focused on the included agency training and augmentation of ROW
widening of I-25 south of Denver, which is currently staff.
in the request for proposal preparation stage using a
design–build approach. The main risk categories See Appendix A for these agencies’ general contact
involved agency unfamiliarity with the process and information.

49
Questionnaire
Basic Survey Participant Information
1. Name / Position / Organization?

2. Primary state / region working in?
3. Address, Phone, Email contacts?
4. Please check the item below which best describes your organization
A. State DOT
B. Other public agency
C. Consultant
D. Contractor
E. Other—please explain
5. Please check your primary construction sector
A. Highway
B. Transit
C. Other—please explain
6. Approximate size of your program ($/yr)?
Rapid Renewal Policy/Market
7. Does your organization have an established policy re. rapid renewal? If so, please summarize.
8. Have you done or are you considering doing rapid renewal projects? If not, why not? If so, please
continue below.
Rapid Renewal Methods and Risks (if you have done or are considering doing Rapid Renewal
Projects)
9. What rapid renewal methods (if any) have you used, or are you considering (please distinguish
between actual and considered), in each of the following areas?
A. Innovative Contracting/Financing
B. Roadway/Geometric Design
C. Structures
D. Traffic Engineering/Safety/ITS
E. Environment
F. Construction
G. Right-of-Way/Utilities/Railroad Coordination
H. Geotechnical/Materials/Accelerated Testing
I. Long Life Pavements/Maintenance
J. Public Relations
10. What problems (with regard to the project performance objectives of Cost, Schedule, Disruption,
Quality/longevity) have arisen (if used), or would you be concerned about (if being considered),
with each of these rapid renewal methods?
11. How might each of these problems have been (if occurred), or could be (if not yet happened),
addressed beforehand?
12. Are you interested in reducing risks (and thereby better meeting the project performance objectives
of Cost, Schedule, Disruption, Quality/longevity) associated with Rapid Renewal Projects? If not,
why not? If so, do you want to be actively involved in this research (e.g., have one of your Rapid
Renewal projects evaluated using the methods developed in this research)?
Figure D.2. Final survey questionnaire (page 2).

Appendix E
Pilot Workshops
Pilot Workshop Planning NC-50/210 in Surf City (see Figure E.1). This is one of two
bridges providing access to Topsail Island (the other is 7 miles
As explained in Chapter 2, an evaluation process was devised away). The existing bridge, a steel-truss swing-span bridge,
to fairly select from among the five DOTs identified as poten- was built in the 1950s and was due for replacement (see
tial candidates for pilot workshops of the guide and imple- Figure E.2 for a view of the replacement plan). The new
mentation materials. A primary set of selection criteria was bridge will address the following needs:
established:
• Provide a connecting structure between the mainland and
• High chance of success of that DOT’s workshop;
the island with sufficient capacity allowing for emergency
• High contribution to the chance of success for that DOT’s
access, hurricane evacuation, and acceptable travel times.
future risk management program; and
• Improve the structural capacity of the bridge.
• High contribution of that DOT to the chance of success of
• Provide consistency with state and local land use and
future national risk management program.
transportation plans (NCDOT 2009).
The factors that contribute to meeting these primary criteria
were identified, and the specific information needed to assess Planned Project Scope, Strategy,
those factors and evaluate the criteria was identified. The five Key Conditions, and Assumptions
DOTs were sent a request for information that would allow the
research team to evaluate their suitability for piloting a risk There are currently 16 alternatives for this bridge replace-
management workshop for rapid renewal. The responses of the ment. Each of the 16 alternatives is essentially a variation on
DOTs to the request for information have been summarized in location of the replacement bridge. There are several “bas-
Table E.1, which allows a side-by-side comparison. The table cule” bridge options in addition to high-rise bridges. For the
also summarizes the scoring based on the selection criteria. purposes of this pilot risk management training course,
Alternative 5 is assumed for evaluation (a cost estimate exists
for this alternative). Therefore, all notes in this base descrip-
First Pilot Workshop tion reflect Alternative 5. At this time, all design criteria are
During the first pilot workshop, participants tested the guide assumptions based on similar bridges. Uncertainty about
and implementation materials on a North Carolina Depart- which alternative is ultimately selected is excluded from this
ment of Transportation (NCDOT) rapid renewal project on training course.
Topsail Island in the Outer Banks. The description reflects the
status of the project at the time of the pilot workshop in 2009. • Scope elements. Major scope elements included in Alterna-
tive 5 are as follows:
44 Replacement bridge will lie on an alignment approxi-
Base Project Description:
mately 450 ft north of the existing bridge that ties back
Topsail Island Bridge Replacement
to NC-50-210 at both ends.
(TIP B-4929) Alternative 5
44 Cost estimate is based on a single 42-ft by 2,647-ft bridge.
NCDOT proposed to build a new bridge to replace the exist- 44 Bridge will accommodate two 14-ft-wide lanes, plus 2-ft
ing swing bridge No. 16 over the Intracoastal Waterway on shoulders and 5-ft sidewalks on each side of the bridge.
(text continues on page 55)
50

Table E.1. Evaluation of Proposals
Questions FDOT MnDOT NCDOT VDOT NYSDOT
A. Briefly describe the Good attendance, but too Good attendance, but too Good attendance, but too Poor attendance for training Assume good attendance
workshop logistics: much project team and much project team and much subject matter and small facility. Reason- for training (future facilita-
not enough potential not enough potential facili- experts and not enough able location—relatively tors). Assume reasonable
facilitators. Reasonable tators. Reasonable loca- potential facilitators. easy to get to. Their dates facility, but hard to get to.
location/facility. Their tion/facility—easiest to get Assume reasonable facil- are unavailable—we can Their dates are flexible—
dates are unavailable— to. They can do Oct. ity, but hardest to get to. see if they can do Oct. assume they can do Oct.
we can see if they can do 22–23 (we can also see if Their dates are flexible— 15–16 (maybe), Oct. 15–16 (maybe) or Oct.
Oct. 15–16 (maybe), Oct. they can do Nov. 12–13). assume they can do 22–23, or Nov. 12–13. 22–23 (we can also see if
22–23, or Nov. 12–13. Oct. 15–16 (maybe), Oct. they can do Nov. 12–13).
22–23, or Nov. 12–13.

1. Proposed workshop 23 (project VE team, project 23 (MnDOT district staff, 20 (design, construction, 12 (district PM, innovative 23 (max).
attendance (i.e., type/ team, district and MnDOT central staff, maintenance, ROW/ project delivery assistant
role of participants HQ VE). several from Wisconsin). utilities, environmental, director, discipline
within the SHA and contracts, VE). managers).
number)? (Note: max
attendance is 23 plus
up to two FHWA staff.)
2. Proposed workshop Miami, FL District 6 Office Capacity of 30 [e.g., Stoney NCDOT HQ in Raleigh (up (a) In VDOT northern district NYSDOT Schenectady
venue (i.e., location, Auditorium (several miles Creek Inn in La Crosse, to 20 mi/30 min from office in Chantilly, VA conference and training
size, facilities, etc.)? from Miami AP; nonstop WI (previous workshop), Raleigh AP, which has (near Dulles airport, center (less than 10 mi
flight into Miami from near project site; 150 one-stop flight into which has nonstop from from Albany AP, which
SEA, 6:47 p.m. flight out miles/2.5 hours from Raleigh AP from SEA, SEA, and 7:11 p.m. flight has one-stop flight from
of Miami to SEA; airfare MSP, which has nonstop and 6:50 p.m. flight out of to SEA; airfare is $290 SEA but last flight out to
is $420 RT and 14 hours from SEA and 9:50 p.m. Raleigh AP to SEA; air- RT and 12.5 hours flying SEA is at 5:50 p.m.; air-
flying time). flight to SEA; airfare is fare is $220 RT and time). fare is $350 RT and
$240 RT and 7 hours fly- 15.5 hours flying time). (b) Small facility (15). 14.5 hours flying time
ing time plus 4 hours plus extra night hotel).
driving].
3. Available dates for Oct. 26–27 or Nov. 4–5 Week of Oct. 19 or 26 Flexible Oct. 26–27 (Mon.–Tues.) 2nd, 3rd, or 4th week of
workshop (two Oct.
contiguous days)?
B. Briefly describe the Project is too big/complex Project is too big/complex Projects (a) and (c) are too Suitable project/info, but Need to select from among
rapid renewal project(s) for training workshop and for training workshop and small; not clear what not clear what rapid many projects—should
that would be evaluated insufficient info provided insufficient info provided rapid renewal feature is renewal feature is be able to identify a
in the workshop, spe- or available on website. or available on website, for (b) and (d). Need to besides D–B. suitable rapid renewal
cifically in terms of the Presumably can either but has had RA recently. select from among many project with adequate
following key use portion of this project Also unclear what rapid projects—should be able info.
attributes: or select from among renewal feature is. How- to identify a suitable rapid
other projects—should ever, presumably can renewal project with ade-
be able to identify a suit- select from among other quate info.
able rapid renewal proj- projects—should be able
ect with adequate info. to identify a suitable rapid
renewal project with
adequate info.
51
Table E.1. Evaluation of Proposals (continued)
52
4. Name and location of SR-93/I-75 Corridor Study Dresbach Bridge Replace- Choices: Route 27/244 IC, Arlington, ? For example,
project? [including Homestead ment (SP8580-149) I-90 (a) Hillsborough St. in VA. (a) Tappan Zee Bridge
Extension of Florida over Mississippi River Raleigh. replacement.
Turnpike (HEFT)]. near Dresbach, MN. (b) US-74 Independence (b) BQE triple cantilever
Blvd. in Charlotte. project in NYC.
(c) I-277 in Charlotte. (c) Other less complex
(d) NC-55 in Durham. projects (many projects
to choose from).
5. Approximate size of Total: $900 million (without Construction cost: $231 Construction amount: Construction contract: $40 ? (Many projects to choose
project (e.g., construc- contingency). million YOE. (a) $3.0 million. million. from.)
tion cost in inflated $)? Without HEFT: $400 million (b) $77.3 million.
(without contingency). (c) $3.6 million.
(d) $25.8 million.
6. Scope of project (a) Add two managed lanes New bridge over Missis- (a) Bridge replacement. Replace Washington Blvd. ? (Many projects to choose
(including rapid in each direction on I-75 sippi River offset from old (b) Widen corridor, road- Bridge and related road from.)
renewal elements)? and SR-826. bridge, requiring realign- way, structures (includ- improvements.
(b) Three new special-use ment of approaches and ing reversible lane BRT Rapid renewal element(s):
lane Ices, and one other reconstruction of IC. accommodations). only D–B?
new IC. Adjacent to RR, lock/ (c) New IC on major urban
(c) Road/IC improvements. dam, and recreation area. Interstate.
(d) P&R lot and noise walls. (d) Widen/replace RR
bridges.
7. Procurement method D–B or D–B–O (toll) D–B–B ? D–B ? (Many projects to choose
(D–B–B or D–B)? from.)
8. Current status of Draft EIS. 30% design (draft EA). (a) Let date: Nov. 2009. 30% design—RFQ. ? (Many projects to choose
project? (b) Let date: June 2012. from.)
(c) Let date: May 2012.
(d) Let date: May 2014.
9. Major project decision (a) D–B vs. D–B–O (toll) vs. (a) D–B vs. D–B–B. ? ? ? (Many projects to choose
alternatives (e.g., PPP. (b) Change alignment (less from.)
regarding scope or (b) ICs. offset and cost).
strategy)? (c) Interagency (c) Innovative construction
coordination. techniques to reduce
disruption.
10. Quality of information Only website provided. Apparently late 2008 ? (a) Parametric estimate. ? (Project description, cost
available for work- CRAVE report (not (b) Schedule. estimate, and schedule
shop (e.g., cost esti- provided). (c) D–B design/contract should be available for
mate, schedule, and Some info available at requirements. selected project.)
project description)? MnDOT website (but not (d) Preliminary design/RFP.
cost or schedule). Some info available on
website.

11. Key project issues? Funding and project deliv- MOT (I-90 truck freight), (a) Urban, utilities, MOT, MOT, utilities, environmen- ? (Many projects to choose
ery, MOT, Ices, inter- RR, lock/dam, recreation constructability, tal, contract from.)
agency coordination. area, topography (500-ft coordination. administration.
high bluffs). (b) Urban, MOT, utilities,
constructability,
coordination with city
and transit.
(c) Urban, MOT, utilities,
constructability,
coordination with city.

(d) Urban, MOT, utilities,
constructability,
coordination with RR.
C. Briefly describe the Large need, but currently Moderate need, but devel- Large need and no RM pro- Moderate need and no RM Large need, but currently
interest your SHA has developing RM oping RM program— gram—high interest. program—moderate developing RM pro-
in setting up a formal program—high interest. moderate interest. interest. gram—high interest.
risk management
program:
12. What experience does Have conducted formal risk Starting to establish formal RM not used on regular, To date: informal RA for Starting to establish formal
your SHA have with analysis on several mega risk management pro- recurring basis. D–B projects. Currently: risk management pro-
formal risk manage- projects. Currently devel- gram, both at broad proj- no formal RM program. gram. Have draft
ment (including an oping RM program ect level and at project guidance.
existing formal risk through Office of Design level. Have established
management pro- team (with district and Project Scope and Cost
gram within your HQ staff), procuring an Management Office.
SHA)? external resource and
drafting procedure.
13. Is your SHA inter- Currently setting up RM Need to broadly implement Yes (enthusiastically). Yes for larger/more com- Yes—high priority.
ested in implementing program to satisfy FHWA RM strategies. plex projects.
formal risk manage- requirement of develop-
ment more widely ing risk-based cost esti-
and, if so, why and to mates if >$100 million.
what extent?
14. How would such a HQ Office of Design for Policy, Analysis, Research Centralized (along with con- Centralized using internal/ Decentralized RM practice
program likely fit in policy, procedures, and and Innovation Office structability, VE, etc.). external resources. with oversight and QA
your organizational oversight; districts charged with RM at from HQ.
structure (e.g., cen- responsible for doing broad program level.
tralized with VE group RM. Project Scope and Cost
versus decentralized, Management Office
internal resources established to cover RM
versus outsourced, at project level.
etc.)?
53
54
15. Approximate size of $3 billion to $4 billion per 2009–2011: $950 million $1.0 billion per year for next Currently $1.5 billion under $2.5 billion per year
your SHA capital pro- year. per year. 5 years in traditionally contract. (including ARRA).
gram (i.e., $/year) and Rapid renewal (e.g., D–B): Rapid renewal: 30%. financed projects. 2010: 276 contracts to ad Rapid renewal: 25% (and
portion that would be 25%. 2010: $3.0 billion by NCTA. at $1.1 billion. growing).
considered rapid Rapid renewal: 15–20%. 2011: 70 contracts to ad at
renewal (i.e., %)? $350 million.
2012: 38 contracts to ad at
$205 million.
But D–B (not included
above) increasing rapid
renewal: ?
16. Approximate average Cost increase just during 40% of projects have time >25% cost and >25% time TBD. 0% to 100% cost increase
cost increase and construction: 5%. overruns (how much?). overruns. (refers to website).
delays on your recent Schedule increase just dur- ?% of projects have cost
capital projects (i.e., in ing construction: 8%. overruns.
%) from planning Presumably, generally more
through construction? from planning.
Timeliness/quality of On time, moderate quality On time, moderate quality 1 week late, moderate qual- On time, good quality (good 1 week late, moderate qual-
response (little re candidate (little re candidate ity (little re candidate candidate project info). ity (little re candidate
project). project). project). project).
Category FDOT MnDOT NCDOT VDOT NYSDOT

A B+ A- B+ B- B
B B B- B A- B-
C A- B- A B B+
Weighted score 3.42 3.05 3.555 3.035 3.075
Grade Points
A+ 4.3
A 4.0
A- 3.7
B+ 3.3
B 3.0
B- 2.7
Category Weight
A 0.35
B 0.2
C 0.45
55
Source: NCDOT.
Figure E.1. Topsail Island bridge replacement.
44 Structure type for the bridge is assumed to be prestressed • Design

concrete (posttensioned girders at channel). The bridge 44 Design level: Alternative 3 is at 0% design overall.
will be a fixed structure (i.e., not movable over the 44 Structural: See above.
waterway). 44 Geotechnical: No information yet on subsurface
44 Vertical clearance of the bridge over the navigation conditions.
channel is 65 ft. 44 Pavement: No pavement design has been determined yet.
44 Assumed substructure (foundation) type is drilled piers. 44 Design deviations: None expected.
Number of foundations/piers is 2. • Environmental
44 Bridge will have 19 to 22 spans. 44 Environmental documentation: NCDOT will prepare an
44 Total project length is 0.92 miles. Construction of new Environmental Assessment (EA) for this project and is
roadway section is required for most of the alignment; completing a National Environmental Policy Act (NEPA)
thus, fill import, compaction, roadway construction and checklist.
asphalt paving are also included. 44 Wetlands: The area is surrounded by wetlands to the
44 Removal of existing bridge No. 16 and its approaches is north and south; bridging of most of these wetlands is
included. anticipated.
44 A fender system may be required. 44 Streams: Intracoastal Waterway.
• Funding. Project is funded (State Transportation Improve- 44 Endangered Species Act (ESA) and Migratory Bird
ment Program) as follows: $200,000 for PE/design; Treaty Act (MBTA): Impacts to ESA are not yet
$1 million for right-of-way (ROW); $25 million for known. Colonial water bird nesting sites are present
construction. in the project area. Mitigation may be required.

56
Source: NCDOT.
Figure E.2. Topsail Island bridge replacement (plan view).
The project is also located within a Primary Nursery Permits will be required with the U.S. Coast Guard, U.S.
Area. Army Corps of Engineers, and North Carolina Division
44 Floodplain: The project is in the 100-year floodplain, of Water Quality.
and the area is tidal influenced. • Right-of-way and other agreements
44 Storm water: It is assumed that a collection system will 44 Right-of-way: The project assumes that a 100-ft right-
be required; there will be no direct discharge into the of-way will be required. Beyond that, easements will be
waterway. required.
44 Contaminated/hazardous waste: No known sites. 44 Utilities: No major utilities are involved in Alternative 5.
44 Section 106: Existing bridge is eligible for listing in the 44 Railroad: There is no railroad involvement.
national register of historic places; no historic districts 44 Other: Additional stakeholders include Surf City, North
or individual properties are known at this time. Topsail Beach, Topsail Beach, and various service agen-
44 Section 4(f): Soundside Park is located adjacent to the cies (e.g., North Carolina Department of Environmental
roadway on the south side. Wildlife Resources Commis- and Natural Resources, U.S. Army Corps of Engineers,
sion also has a boat landing at this site; it is the only U.S. Coast Guard).
public boat access in the vicinity. • Procurement
44 Permitting (including 404): Coastal Area Management 44 Delivery method: The project expects to use traditional
Act (CAMA) major development and/or dredge/fill per- procurement.
mit is required; state storm water permit is also required. 44 Contract packaging: Single contract.

57
• Construction • Construction: Contract cost of $30.7 million, including

44 Construction access/restrictions (including seasonal, 15% E&C.
events, shifts/hours): There will likely be an in-water 44 Estimate is in October 2009 dollars (per the
construction moratorium from February 15 to Septem- spreadsheet).
ber 30 for the Primary Nursery Area. 44 Line items labeled “Misc. and Mob” allowances for
44 Maintenance of traffic/business (disruption): During known costs and contingency for risk.
construction, traffic will continue to use the existing • O&M: Estimated average annual O&M for new bridge is
movable bridge. There will be interruptions due to inter- $50,000/year.
section tie-ins. Services to businesses and residences will • Replacement: Not estimated.
be affected.
44 Construction phasing
▪▪ Assumption is that new bridge will be built first, then Project Schematics
tie-ins, and then the old bridge will be removed. See Figures E.1 and E.2.
▪▪ During construction, traffic will remain on the existing
movable bridge No. 16. On completion of construction,
the existing bridge will be removed (demolished). Evaluation of First
44 Rapid renewal: There are no plans for rapid-renewal Pilot Workshop
construction elements/methods.
The evaluation of the first pilot workshop was held in Raleigh,
• Postconstruction (longevity)
N.C., for NCDOT/NCTA on October 29–30, 2009. It con-
44 Operations and maintenance (O&M): No projections
sisted of the following:
for operation/maintenance.
44 Replacement: 75 years. • Participants’ evaluation of the workshop (using an evalua-
tion form that accommodated comments; see Table E.3);
Table E.2 shows the project activity and planned start and • Initial SHRP 2 staff comments on the workshop and mate-
completion dates.
rials, and the research team response to those comments;
and
• Additional SHRP 2 staff comments on the workshop and
Project Cost Estimate (Delivery,
materials, and the research team response to those
O&M, Replacement)
comments.
• Professional engineer (preliminary and final design/
PS&E): $5 million, 2009 dollars, without contingency. A proposal was developed by the project team and subse-
• Right-of-way: $12.5 million, 2009 dollars, without quently approved by the SHRP 2 program officer to resolve
contingency. some of the major comments (see the subsection Approved
• Utilities: $546,000, 2009 dollars, without contingency. Changes).
Table E.2. Project Schedule
Project Activity/Phase Planned Start Date Planned Completion Date
Scoping Complete Complete

Preliminary design/engineering Ongoing 6/2013
Environmental process [NEPA, environmental assessment, Finding of No Significant Ongoing EA: 11/2010
Impact (FONSI)] FONSI: 12/2011
Permitting 12/2010 6/2014
Final design/plans, specifications, and estimates (PS&E), including approvals 6/2013 3/2015
ROW acquisition (including demolition, relocation, and certification) 6/2013 3/2015
Utility coordination/relocation 7/2013 6/2015
Procurement (e.g., advertisement/bid/award/notice to proceed) 3/2015 6/2015
Construction 8/2015 8/2017

58
Table E.3. Summary of Participants’ Evaluations of First Pilot Workshop
Question 1 2 3 4 5 Total Average
1. Did the presentation follow the course materials? 11 6 17 4.35

2. Were the workshop goals and objectives clear? 2 11 4 17 4.12
3. Were the goals and objectives met? 3 10 4 17 4.06
4. Did the workshop advance your knowledge of risk management? 6 11 17 4.65
5. Was the workshop useful in assessing and managing risk on the project 3 4 10 17 4.41
reviewed on Day 2?
6. Will the workshop help you assess and manage risk for your projects? 4 8 5 17 4.06
7. For your DOT implementation, what type of implementation do you believe Average
would have benefit? (0 = no,
Yes No Total 1 = yes)
Use for moderately sized conventional projects [design–bid–build (D–B–B)]. 4 13 17 0.24
Use for major conventional projects (D–B–B). 15 2 17 0.88
Use for nonconventional projects [design–build (D–B), concessionaire, etc.]. 6 11 17 0.35
Provide general training to department staff. 5 12 17 0.29
Develop a formal risk management program that is integrated in the 13 4 17 0.76
project development process.
Other 1 16 17 0.06
Please provide your comments/suggestions on the workshop. <in comments>
Would your DOT be interested in having additional training or project evaluations? 7 0 7 1.00
Participant Evaluations of First worked successfully on a previous, similar training course

Pilot Workshop and been approved for this course.
The proposed rescoping consisted of replacing the real proj-
Seventeen course participant evaluations of the first pilot ect application in the course with a more fully developed hypo-
workshop were submitted. Those responses are tallied and thetical project. The hypothetical project then allowed for
summarized in Table E.3. more extensive exercises to be integrated with each lecture and
did not require attendance by project staff. The course was still
Approved Changes to be completed in 2 days but at a more relaxed pace, with ade-
quate time for discussions, introductions, reviews, summaries,
A change in scope was proposed to remedy most of the substan- and breaks. The rescoping also involved inviting primarily
tive issues identified in the first pilot workshop evaluation, potential future facilitators from the various state DOTs that
which led to the postponement of the second workshop. had submitted proposals to host a pilot workshop to the sec-
The primary issue associated with the first pilot workshop ond and final training workshop. The course instructors
was that there was too much lecturing on Day 1 (although (under additional or separate funding) could subsequently
this was balanced by the real project application on Day 2). observe and advise the newly trained facilitators when they
Instead more exercises needed to be integrated with the lec- conduct risk management on their own projects, as needed.
tures. Also, feedback suggested that too much material was Other comments that were addressed related primarily to
presented too quickly on Day 1. Instead, a slower pace was presentation style (some of which was affected by the fast
needed, with more introductions, summaries, and reviews of pace noted above) and material format.
each module, as well as more breaks. It was also agreed that the following changes would be
The original agenda had been developed to accommodate made to the guide and implementation materials:
the original scope of work, which included a real project
application, while minimizing the time of busy project staff • Expand the example rapid renewal project (including a
(who needed to attend only on Day 2 and would otherwise complete risk management plan) to become a central and
dilute the class on Day 1). The original agenda had also integral part of the guide and training (per the approved

59
change in scope), replacing the actual project evaluation ▪▪ Identify learning outcomes better (e.g., in objectives).
on the second day of the workshop. Note that to generate a ▪▪ Make training module number same as guide chapter
risk management plan, this would include a project number.
description, base cost and base schedule (including ranges/ 44 Reformat the notebook.
correlations for full uncertainty version), risk register ▪▪ Print some of the paper forms on 11 × 17 paper (as
(identification and assessment, for both expected value needed) and include copies of the relevant ones at the
and full uncertainty version), risk analysis model/results, end of each module for use in the exercises (as well as
and risk mitigation identification/evaluation. in the guide for future use).
• Revise the guide, slides, and syllabus to incorporate ▪▪ Create a specific exercise packet (i.e., the hypotheti-
the example rapid renewal project throughout (per the cal project write-up) that can be easily removed
approved change in scope), replacing the actual project from the notebook for use during the class and then
evaluation on the second day of the workshop. Note that reinserted back into the notebook, along with the
the example rapid renewal project was to be used through- relevant filled-in forms when done (both student
out the guide and training to illustrate the process. Once version and instructor version). This would create a
finalized, this example project was to be integrated into the sample stand-alone risk register and risk manage-
training materials as the primary learning exercise for each ment plan for the hypothetical project and enhance
module (i.e., each step of the risk management process student learning.
would be conducted by the students for this example proj- ▪▪ Produce the rapid renewal risk and risk management
ect using the provided methods, guidance, and forms), inventories (which are guide appendices) so that they
followed by the instructors’ “solution,” which would be can be easily removed from the notebook for use dur-
used going forward to subsequent steps in the process. ing the class and then reinserted back into the note-
• Edit the guide and materials. book when done.
44 Revise Chapter 8 of the guide (in particular) to be more
consistent with the slides and other chapters.
Second (and Final)
44 Revise the template (an MS Excel workbook) and hard-
Pilot Workshop
copy forms to be more functional, and develop a user’s
guide for the template. Attendance at the second pilot workshop was opened up to
44 Develop an introductory slide module (in MS Power- various DOTs. Positions of attendees are found in Table E.4.
Point) for risk workshops.
44 Reformat animated/annotated training slides (in MS
Evaluation of the Second
PowerPoint) to the extent possible.
(and Final) Pilot Workshop
▪▪ Simplify slides as necessary and as possible (consider-
ing available budget and original scope of work). A survey was handed out to participants at the second pilot
▪▪ Avoid red/green colors when possible. workshop. The results of that survey are documented in
▪▪ Add definitions as necessary (e.g., in notes). Table E.5.

60
Table E.4. Attendance List at Second Pilot Workshop, May 18–19, 2010,
Redmond, Washington
Affiliation Position
TRB SHRP 2 program officer

FHWA Columbia River Bridge (major project) engineer
FHWA Washington Division: Construction, pavements, materials engineer
Washington State DOT Cost risk estimating team leader
Washington State DOT Manager of project development
Washington State DOT Director of project control and reporting
Washington State DOT Lead risk modeler
Washington State DOT Transportation technical engineer
Minnesota DOT Director of Office of Project Scoping and Cost Management
Minnesota DOT Office of Project Scoping and Cost Management
Nevada DOT Program director
North Carolina DOT Quality Enhancement Unit
Oregon State University Professor
University of Colorado Co-principal investigator/professor
Golder Associates Co-principal investigator/principal
Golder Associates Principal
Table E.5. Summary of Participants’ Evaluations of Second Pilot Workshop
Question 1 2 3 4 5 Total Average
1. Did the presentation follow the course materials? 1 2 3 4.67

2. Were the workshop goals and objectives clear? 2 1 3 4.33
3. Were the goals and objectives met? 3 3 4.00
4. Did the workshop advance your knowledge of risk management? 1 1 1 3 3.67
5. Was the workshop useful in assessing and managing risk on the project 1 2 3 3.67
reviewed on Day 2?
6. Will the workshop help you assess and manage risk for your projects? 1 1 1 3 3.00
7. For your DOT implementation, what type of implementation do you believe Average
would have benefit? (0 = no,
Yes No Total 1 = yes)
Use for moderately sized conventional projects (D–B–B). 2 1 3 0.67
Use for major conventional projects (D–B–B). 1 2 3 0.33
Use for nonconventional projects (D–B, concessionaire, etc.). 1 2 3 0.33
Provide general training to department staff. 2 1 3 0.67
Develop a formal risk management program that is integrated in the project 3 0 3 1.00
development process.
Other 0 3 3 0.00
Please provide your comments/suggestions on the workshop. <in comments>
Would your DOT be interested in having additional training or project evaluations? 1 0 1 1.00

Appendix F
Recommendations for Future Work
61

Table F.1. Recommendations for Future Work
62
Short Term Longer Term Total
Proposed Activity Assumptions Estimated Cost Assumptions Estimated Cost Estimated Cost
Regarding the Guide (and Tools) Sum of all short-term $65,000 Sum of all longer term $187,000 $252,000
guide work (excluding guide work (excluding (excluding
management) management) management)
• Develop webinar (possibly paid in part by participants— 40 h (develop) × 50% cost $4,000 20 h (update) × 50% cost $2,000 $6,000
“cost sharing”). sharing with attendees sharing with attendees
• Write papers and make presentations (including webinars, Prepare and present paper $20,000 Present at 2011 TRB, 2011 $36,000 $56,000
if developed), as well as develop brochures, on guide. at 2010 AASHTO (50 h + AASHTO, 2011 TCM
Present at various venues (e.g., TRB Annual Meeting, travel cost) and develop/ (150 h + travel costs)
AASHTO Annual Meeting, TCM International Conference) distribute brochure
for exposure. (30 h + material costs)
• Plan and conduct 1- or 2-day users’ conference in conjunc- 80 h (planning only) × $8,000 120 h + travel and material $15,000 $23,000
tion with well-attended event (e.g., TCM International Confer- 50% cost sharing with costs (three staff to
ence). Possibly paid in part by participants—cost sharing. attendees conduct) × 50% cost
sharing with attendees
• Continue to obtain feedback and plan/improve materials 20 h (minimal fixes) $4,000 100 h (for improvements) $20,000 $24,000
(e.g., fix bugs in template, incorporate “inventories” into
template, improve user interface).
• Define and monitor metrics (e.g., collective and average 20 h (define only) $4,000 40 h (monitor) $8,000 $12,000
project cost savings) to describe the benefits of implementing
the guide.
• Plan, develop, and maintain database of approved case 20 h (planning only) $4,000 200 h (capture 25 projects $40,000 $44,000
studies (e.g., considering confidentiality, including metrics). in database, at 8 h each)
• Plan, develop, maintain, and ultimately transfer website that 40 h (planning only) $8,000 200 h (develop, maintain, $40,000 $48,000
would contain latest materials (i.e., guide, template, overview transfer)
presentation, training presentation, references) for download-
ing, news, approved case studies (if collected), implementa-
tion metrics (if developed), and contact/help.
• Assist DOTs in setting up internal risk management group Sum of short-term $13,000 Sum of longer term $26,000 $39,000
and implementing guide, in addition to training (which is application/ application/
separate). Include “hand-holding” and review during initial organizational organizational
applications (which might become case studies) and recom- assistance assistance
mending organizational structure/procedures (possibly cost
sharing).
44 On site (one staff, includes travel). One DOT (80 h + travel $9,000 Two DOTs (each 80 h + $18,000 $27,000
cost) × 50% cost travel cost) × 50% cost
sharing with DOT sharing with DOT
44 Remotely (e.g., review). One DOT (40 h) × 50% $4,000 Two DOTs (each 40 h) × $8,000 $12,000
cost sharing with DOT 50% cost sharing with
DOT
Table F.1. Recommendations for Future Work (continued)
Regarding Training Sum of all short-term $81,000 Sum of all longer term $144,000 $225,000
training work (excluding training work (excluding (excluding
management) management) management)
• Plan/develop (convert to) NHI course. Conducting is 40 h (planning only) $8,000 200 h (develop) $40,000 $48,000
separate (see below).
• Plan/develop streamlined (half day) version for familiarization 80 h (planning and $16,000 20 h (update) $4,000 $20,000
(e.g., for TRB Annual Meeting, TCM International Conference, develop)

DOT executives). Conducting is separate (see below).
• Conduct additional live training (possibly cost sharing). Sum of short-term live $21,000 Sum of longer term live $42,000 $63,000
training training
44 Existing version or NHI version (if developed). Sum of short-term $15,000 Sum of longer term $30,000 $45,000
existing/NHI training existing/NHI training
▪▪ On site (two instructors, includes travel and materials). One DOT (80 h + travel $10,000 Two DOTs (each 80 h + $20,000 $30,000
and material costs) × travel and material
50% cost sharing costs) × 50% cost
with DOT sharing with DOT
▪▪ Via web meeting (includes two instructors, if interaction One DOT (50 h) × 50% $5,000 Two DOTs (each 50 h) × $10,000 $15,000
developed). cost sharing with DOT 50% cost sharing with
DOT
44 Streamlined version (if developed). Sum of short-term $6,000 Sum of longer term $12,000 $18,000
streamlined training streamlined training
▪▪ On site (one instructor, includes travel and materials). One DOT/conference (30 h $4,000 Two DOTs/conferences $8,000 $12,000
+ travel and material (each 30 h + travel and
costs) × 50% cost shar- material costs) × 50%
ing with DOT/attendees cost sharing with DOTs/
attendees
▪▪ Via web meeting (one instructor). One DOT (20 h) × 50% $2,000 Two DOTs (each 20 h) × $4,000 $6,000
cost sharing with DOT 50% cost sharing with
DOT
• Develop remote version (with or without practical exercises— Sum of short-term remote $24,000 Sum of longer term remote $6,000 $30,000
see below). Conducting is separate (see below). development work development work
44 Record training course (slides plus audio) for web 80 h (initial) $16,000 20 h (update) $4,000 $20,000
download.
44 Develop a way for instructors to interact with participants 40 h (initial) $8,000 10 h (update) $2,000 $10,000
(e.g., they submit questions via e-mail and instructors reply via
e-mail) and to conduct practical exercises remotely (e.g., at
end of each module: (a) if self-study, students submit answers
to instructors via web and receive corrections from instructors
via web; or (b) if via web meeting, have discussion via telecon-
63
ference and then discuss instructors’ answers).

Table F.1. Recommendations for Future Work (continued)
64
• Respond to remote learning issues (e.g., respond to submit- $0 400 h (100 participants $40,000 $40,000
ted questions and correct submitted practical exercises) if × 4 h each average)
developed (possibly cost sharing). × 50% cost sharing with
participants
• Arrange for continuing education credit (CEU) for participants 40 h (initial) $8,000 20 h (update) $4,000 $12,000
(based on specific criteria, such as passing practical exer-
cises or exam, which would have to be developed).
• Assist in applications by trainees to enhance their training, Sum of short-term $4,000 Sum of longer term $8,000 $12,000
separately and in addition to simply helping with application application assistance application assistance
(possibly cost sharing).
44 On site during workshop (includes travel). One DOT (20 h in addition $2,000 Two DOTs (each 20 h in $4,000 $6,000
to guide application) × addition to guide
50% cost sharing application) × 50% cost
44 Remotely (e.g., review). One DOT (20 h in addition $2,000 Two DOTs (each 20 h in $4,000 $6,000
to guide application) × addition to guide
50% cost sharing application) × 50% cost
Subtotal (excluding management) Sum of all short-term work $146,000 Sum of all longer term $327,000 $473,000
(excluding management) work (excluding (excluding
management) management)
Regarding Management (e.g., monthly/quarterly reports, 10% of short-term work $15,000 10% of longer term work $33,000 $48,000
other miscellaneous requests)
Total Sum of all short-term work $161,000 Sum of all longer term $360,000 $521,000
+ management work + management
TRB Oversight Committee for the Strategic Highway Research Program 2*

Chair: Kirk T. Steudle, Director, Michigan Department of Transportation
MEMBERS
H. Norman Abramson, Executive Vice President (retired), Southwest Research Institute
Alan C. Clark, MPO Director, Houston–Galveston Area Council
Frank L. Danchetz, Vice President, ARCADIS-US, Inc.
Malcolm Dougherty, Director, California Department of Transportation
Stanley Gee, Executive Deputy Commissioner, New York State Department of Transportation
Mary L. Klein, President and CEO, NatureServe
Michael P. Lewis, Director, Rhode Island Department of Transportation
John R. Njord, Executive Director (retired), Utah Department of Transportation
Charles F. Potts, Chief Executive Officer, Heritage Construction and Materials
Ananth K. Prasad, Secretary, Florida Department of Transportation
Gerald M. Ross, Chief Engineer (retired), Georgia Department of Transportation
George E. Schoener, Executive Director, I-95 Corridor Coalition
Kumares C. Sinha, Olson Distinguished Professor of Civil Engineering, Purdue University
Paul Trombino III, Director, Iowa Department of Transportation
EX OFFICIO MEMBERS
Victor M. Mendez, Administrator, Federal Highway Administration
David L. Strickland, Administrator, National Highway Transportation Safety Administration
Frederick “Bud” Wright, Executive Director, American Association of State Highway and Transportation Officials
LIAISONS
Ken Jacoby, Communications and Outreach Team Director, Office of Corporate Research, Technology, and Innovation Management,
Federal Highway Administration
Tony Kane, Director, Engineering and Technical Services, American Association of State Highway and Transportation Officials
Jeffrey F. Paniati, Executive Director, Federal Highway Administration
John Pearson, Program Director, Council of Deputy Ministers Responsible for Transportation and Highway Safety, Canada
Michael F. Trentacoste, Associate Administrator, Research, Development, and Technology, Federal Highway Administration
*Membership as of July 2014.
RENEWAL TECHNICAL COORDINATING COMMITTEE*

Chair: Daniel D’Angelo, Recovery Acting Manager, Director and Deputy Chief Engineer, Office of Design, New York State Department
of Transportation
MEMBERS
Rachel Arulraj, President, InfoInnovation
Michael E. Ayers, Consultant, Technology Services, American Concrete Pavement Association
Thomas E. Baker, State Materials Engineer, Washington State Department of Transportation
John E. Breen, Al-Rashid Chair in Civil Engineering Emeritus, University of Texas at Austin
Steven D. DeWitt, Chief Engineer (retired), North Carolina Turnpike Authority
Tom W. Donovan, Senior Right of Way Agent (retired), California Department of Transportation
Alan D. Fisher, Manager, Construction Structures Group, Cianbro Corporation
Michael Hemmingsen, Davison Transportation Service Center Manager (retired), Michigan Department of Transportation
Bruce Johnson, State Bridge Engineer, Oregon Department of Transportation, Bridge Engineering Section
Leonnie Kavanagh, PhD Candidate, Seasonal Lecturer, Civil Engineering Department, University of Manitoba
Cathy Nelson, Technical Services Manager/Chief Engineer (retired), Oregon Department of Transportation
John J. Robinson, Jr., Assistant Chief Counsel, Pennsylvania Department of Transportation, Governor’s Office of General Counsel
Ted M. Scott II, Director, Engineering, American Trucking Associations, Inc.
Gary D. Taylor, Professional Engineer
Gary C. Whited, Program Manager, Construction and Materials Support Center, University of Wisconsin–Madison
AASHTO LIAISON
James T. McDonnell, Program Director for Engineering, American Association of State Highway and Transportation Officials
FHWA LIAISONS
Steve Gaj, Leader, System Management and Monitoring Team, Office of Asset Management, Federal Highway Administration
Cheryl Allen Richter, Assistant Director, Pavement Research and Development, Office of Infrastructure Research and Development,
Federal Highway Administration
J. B. “Butch” Wlaschin, Director, Office of Asset Management, Federal Highway Administration
CANADA LIAISON
Lance Vigfusson, Assistant Deputy Minister of Engineering & Operations, Manitoba Infrastructure and Transportation
*Membership as of July 2014.

Performance Specifications for Rapid Highway Renewal (R07)

Project Management Strategies for Complex Projects (R10)
Integrating the Priorities of Transportation Agencies and Utility Companies (R15)
Identification of Utility Conflicts and Solutions (R15B)
Strategies for Improving the Project Agreement Process Between Highway
Agencies and Railroads (R16)

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National Academies of Sciences, Engineering, and Medicine 2014. Developing the

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Developing the “Guide for the Process of

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The Second Strategic Highway SHRP 2 Report S2-R09-RW-1

More information about SHRP 2:

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Ann M. Brach, Director

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• A comprehensive guide, which includes extensive checklists and a comprehensive example of a

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• Task 1: Develop a work plan. First the team evaluated gaps

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Findings and Applications

Overview with revisions June 4, 2008), sufficient research was con­

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Figure 2.1. Summary of skill sets used in 25 ACTT projects.

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Table 2.2. Risk Categories and Risk Management Actions

Risk Categories Risk Management Actions

Potential failure of innovative equipment Innovative delivery methods (design–build, CMR)

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Notes: <x> = lag

Figure 2.3. Design–build (D/B) project phases.

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Conclusions and Suggested Additional Research

Conclusions including metrics) be given at various appropriate venues to

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Annotated Bibliography and Agency Contact List

Annotated Bibliography Abi-Karam, T. Managing Risk in Design–Build. AACE International

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Overview with revisions June 4, 2008), sufficient research was con

1. Did the presentation follow the course materials? 11 6 17 4.35